Question: If the Fed had adopted inflation targeting and used the Taylor rule to hit its target, how would the course of the federal funds rate

If the Fed had adopted inflation targeting and used the Taylor rule to hit its target, how would the course of the federal funds rate have been different from the course that it did take? How would inflation and the output gap have been different?

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This question requires knowledge of macroeconomic theory and particularly of the Taylor Rule The Taylor Rule in simplified form suggests that the Fede... View full answer

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