Use the estimation results of the Taylor rule shown in below to provide an estimate of what the Taylor Rule suggests for the FFR in 2022q4. Note that for 2022q4, the inflation rate (measured from core PCE) was 4.8%, potential real GDP was $20,362.02 Billion, and actual real GDP was $20,182.49 Billion. (When using these numbers, input the inflation and interest rate as x.yz if it is x.yz% rather than 0.0xyz, since the regression results are obtained that way).

The Taylor Rule Until recently, the Fed's behavioral rule was well summarized by the a simple linear equation known as Taylor Rule it = * + + ( *) + a (log Y - log Y) Estimate the equation i = + Our estimates (1985q1 - 2019q4): Po = 0.4894; = 1.7966; = 0.6643; R = 0.5472; RMSE=1.876 + 9 (log Y, - log Y) + & - -1=0.7966 = = 0.6643 * = * = 2.0826 where * = 2%