What does a taylor rule do for monetary policy

Reference no: EM133441172

Question 1. What does a Taylor Rule do for monetary policy?

Question 2. Explain the concept and the importance of the Taylor principle.

Question 3. Consider a simple Taylor Rule that considers only the inflation rate, i_t = f(π_t). What simple mathematical expression represents the Tay- lor Principle and why must this expression hold?

Reference no: EM133441172

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