The Taylor rule in Problem 9 is thought to be a reasonably good description of policy behavior
Question:
The Taylor rule in Problem 9 is thought to be a reasonably good description of policy behavior in the United States in the absence of unusual financial market conditions or deflationary worries. Taking into account what you know about the policy goals of the ECB, how would you amend the Taylor rule to better approximate policy making behavior by the ECB?
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The ECB has a hierarchical mandate where price stability is accorded greater im...View the full answer
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Related Book For 
Money Banking and Financial Markets
ISBN: 978-1259746741
5th edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
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