Question
Consider the following version of the Taylor rule, where monetary policy depends only on inflation: i = + + ( ) Now consider the effect
Consider the following version of the Taylor rule, where monetary policy depends only on inflation: i = + + ( )
Now consider the effect of a positive supply shock, v1 > 0. Compare and contrast the effect of this shock on the economy in the original framework versus this new one. Is there any differences? Why?
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Valuing The Earth, Economics, Ecology, Ethics
Authors: Herman E Daly, Kenneth N Townsend
2nd Edition
0262540681, 9780262540681
