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- Are inflation targeting Central Banks’ forecasts internally consistent with the Taylor Principle?Publication . Kogelfranz, Jan-Martin; Frenkel, Michael; Neves, João Luis César das; Jung, Jin-KyuThis thesis addresses the vital question whether ex ante inflation targeting central banks’ forecasts are internally consistent with the undisputable Taylor Principle. Ex ante quarterly published monetary policy forecasts for t+1 and t+2 years for the Swedish Riksbank, and the Reserve Bank of New Zealand as well as ex ante quarterly published monetary policy forecasts for t+1 year for the U.S. Fed are evaluated for the period from Q1/1996 to Q2/2017.Various Taylor-type Rule specifications are used for the analysis. Ex ante central banks’ forecasts are proven to be consistent with the Taylor Principle pre-financial crisis for the ex ante forecast horizon of t+1 year in all cases and for the t+2 year time forecast in the case of New Zealand. Post-crisis evidence for monetary policy behavior, consistent with the Taylor Principle, can only be provided for the Swedish Riksbank, indicating an extreme shift in monetary policy post-financial crisis for the U.S. Fed and the Reserve Bank of New Zealand. Finally, evidence for excessive interest rate smoothing behavior and policy inertia, ranging up to 90% as well as evidence for a potential break in real interest equilibrium rates post-financial crisis, is provided.