Now, suppose in the NKRE model that the central bank follows a Taylor rule as in Equation

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Now, suppose in the NKRE model that the central bank follows a Taylor rule as in Equation (15 - 8), and h < -d/a.Show what this implies for steady state equilibria, and for the whole set of equilibria that can arise, and explain your results with the aid of a diagram.

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Macroeconomics

ISBN: 978-0134472119

6th Edition

Authors: Stephen D. Williamson

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