Relevance of the taylor rule during world economic crises in the Slovak Republic

Abstract

Monetary rules as e.g. the Taylor-Type rules are popular thanks to their simplicity and transparency. However, period of crises threatened their position in application of monetary policy. The paper tries to verify validity of the Taylor type rules in times of economic crises. It analyses relevance of the rule especially in Slovakia as the latest member of the euro area. Application of a monetary rule by an individual member state within a monetary union can be questionable. The contribution tries to characterize importance of monetary rule calculations by individual euro area member states especially in the context of world economic crises. Key words: monetary rules, Taylor rule, economic crises, the National Bank of Slovakia, euro zone