According to former Fed Chair Ben Bemanke, during the latter part of Alan Greenspan's tenure as
Fed Chair, Fed interest rate decisions were consistent with a "modified Taylor Rule* in which
A© the FOMC reduced R whenever the GDP gap berame negative but increased it when the GDP gap became
positive.
B© the FOMC measured the inflation rate as the percentage change in the Core PCE Index rather than as the
percentage change in the implicit GDP deflator.
CO the FOMC gave a greater weight to current inflation than the weight in Taylor's original rule.
DO the FOMC gave a smaller weight to the GDP Rap than the 0.5 weight that is assumed in Taylor's original rule