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Ok-Pomegranate-6189 t1_itq8dy5 wrote

What is the goal under the Taylor rule? The ideal interest rate would be a lot different if they wanted to ensure the bank’s mortgages didn’t lose value vs promoting economic growth.

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Efficient-Sport-6673 OP t1_itqamb4 wrote

Price stability. It really just suggests what the nominal rate should be in order to reach the inflation target. In this analysis I assumed target to be 2%. BTW taylor rule has actually approximated actual fed monetary policy quite well in the past.

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