Suppose for a moment that Jerome Powell as called on you for advice. Calculate the target FED Funds rate using the Taylor rule where the PCE price index is 4.4%, the real FED funds rate is -3.2%, and the annual growth rate is estimated at 4.9% in conjunction with the FED’s inflation and growth targets. Employing the estimated target rate, carefully outline the advice you would offer to Mr. Powell on current monetary policy given that the FED funds target is near zero
Suppose for a moment that Jerome Powell as called on you for advice. Calculate the target FED Funds rate using the Taylor rule where the PCE price index is 4.4%, the real FED funds rate is -3.2%, and the annual growth rate is estimated at 4.9% in conjunction with the FED’s inflation and growth targets. Employing the estimated target rate, carefully outline the advice you would offer to Mr. Powell on current monetary policy given that the FED funds target is near zero
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 11QP
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Suppose for a moment that Jerome Powell as called on you for advice. Calculate the target FED Funds rate using the Taylor rule where the PCE price index is 4.4%, the real FED funds rate is -3.2%, and the annual growth rate is estimated at 4.9% in conjunction with the FED’s inflation and growth targets. Employing the estimated target rate, carefully outline the advice you would offer to Mr. Powell on current
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