The Taylor rule is a simple equation that describes movements in the target federal funds rate It suggests that a When inflation rises, the FOMC raises the target rate by 1 times the increase in inflation b When output rises above potential by 1 percent, the FOMC raises the target rate by percentag...

The Taylor rule is a monetary policy guideline named after economist John Taylor It suggests that ce ...

The Taylor rule is a simple equation that describes movements in the target federal funds rate. It

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The Taylor rule is a simple equation that describes movements in the target federal funds rate. It suggests that:

a. When inflation rises, the FOMC raises the target rate by 1½ times the increase in inflation.

b. When output rises above potential by 1 percent, the FOMC raises the target rate by ½ percentage point.

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Money Banking And Financial Markets

ISBN: 9781260226782

6th Edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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Question Posted: Mar 21, 2024 05:42 AM

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