2. Monetary Policy Rule A basic monetary policy rule we discussed is that when inflation changes unexpectedly the central bank should adjust its policy rate in the same direction and more than the change in inflation. Why is this thought of as an essential move by the central bank?
2. Monetary Policy Rule A basic monetary policy rule we discussed is that when inflation changes unexpectedly the central bank should adjust its policy rate in the same direction and more than the change in inflation. Why is this thought of as an essential move by the central bank?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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