Practice: Is it possible for the Taylor Rule to suggest a target federal funds rate to be negative? Assume the current inflation rate is 0%, the equilibrium real federal funds rate is 2%, and the target inflation rate is 2%.
Concept #1: Taylor Rule
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Example #1: Taylor Rule
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Practice: Is it possible for the Taylor Rule to suggest a target federal funds rate to be negative? Assume the current inflation rate is 0%, the equilibrium real federal funds rate is 2%, and the target inflation rate is 2%.
Ask unlimited questions and get expert help right away.
