Tuesday, November 9, 2010

Graph: Taylor Rule vs. Mankiw Rule vs. Fed Funds Rate

This graph compares the Taylor Rule and the Mankiw Rule to the effective Federal Funds Rate. Click on the image to see an enlarged version.

The Taylor Rule and the Mankiw Rule intend to proscribe effective monetary policy, while the Fed Funds Rate is what the Federal Reserve actually did, regardless of whether is was helpful or harmful.

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