Two economists at the Federal Reserve Bank of Cleveland noted that estimates of potential GDP are very

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Two economists at the Federal Reserve Bank of Cleveland noted that “estimates of potential GDP are very fluid, [which] suggests there is considerable error in our current measure.” They concluded that “this lack of precision should be recognized when policy recommendations are made using a Taylor-type rule.” Briefly explain their reasoning.

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Economics

ISBN: 978-0134738321

7th edition

Authors: R. Glenn Hubbard, Anthony Patrick O Brien

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