Suppose that the equilibrium real federal funds rate is 2.5% and the target inflation rate is 1.5%. If the current infla
Posted: Thu Apr 28, 2022 10:56 am
Suppose that the equilibrium real federal funds rate is 2.5% and
the target inflation rate is 1.5%. If the current inflation is
3.25% and the output gap is 3.6%, use the Taylor rule to find the
federal funds rate that the Fed should choose. Express your answers
as a percentage. Round your answers to the nearest 1000th
percentage point. For example, write 3.789 for 3.789%.
the target inflation rate is 1.5%. If the current inflation is
3.25% and the output gap is 3.6%, use the Taylor rule to find the
federal funds rate that the Fed should choose. Express your answers
as a percentage. Round your answers to the nearest 1000th
percentage point. For example, write 3.789 for 3.789%.