The end of Taylor rules

Central banks have for a long time had a behaviour of setting short-term interest rates that has been well described by a Taylor rule: the interest rate depends on inflation and the capacity utilisation rate (the output gap) or unemployment. But since the subprime crisis, Taylor rules have no longer represented central bank behaviour (we look at the Federal Reserve and the ECB), for two successive reasons: First, the fact that short-term interest rates cannot be negative (the zero lower bound); Second, the fact that central banks have introduced a new objective: maintaining government solvency. Before the COVID crisis, the reason why central banks no longer followed the usual Taylor rule was not that it led to a negative interest rate (this was the case during the subprime crisis), but because they had this new objective that made it necessary to keep interest rates low.