Question
Consider the following Taylor equation: it=i*+1.5(t - *) - 0.5(Ut - Un) Please explain the economic intuition behind the components of the Taylor equation. Calculate
Consider the following Taylor equation:
it=i*+1.5(t - *) - 0.5(Ut - Un)
Please explain the economic intuition behind the components of the Taylor equation. Calculate the interest rate the Central Bank must adopt if this rule is applied in the following situation:i*=2%, t=5%, *=2%, Ut=8%, Un=6%. Comment on the results.
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The Ethics Of The New Economy Restructuring And Beyond
Authors: Leo Groarke
1st Edition
1554586933, 9781554586936
