=+ b. Lets now change the model slightly by supposing that the Feds loss function is quadratic

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b. Let’s now change the model slightly by supposing that the Fed’s loss function is quadratic in both infl ation and unemployment. That is, L(u, ) = u2 + 2

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Macroeconomics

ISBN: 9781429240024

8th Edition

Authors: N Gregory Mankiw

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