Material Detail

This case computes a Taylor rule for monetary policy over time. This activity can be used as either (a) an instructor-led example in which the instructor shows –either on paper or a screen– the data and students analyze them, or (b) as a student exploration in which students find the specified data. Instructors with less time could use option (a) and instructors interested in their students learning about the FRED database could use option (b).This activity plots a Taylor rule-determined target interest rate for monetary policy as a function of a price index (the Consumer Price Index for All Urban Consumers) –expressed in growth rates- and the unemployment gap (the difference between the Civilian Rate of Unemployment and the Natural Rate of Unemployment (Long-Term)). The secular trend and the cyclical behavior of this target interest rate can be compared to the Federal Funds Rate that the Federal Reserve System actually targeted.

This will delete the comment from the database. This operation is not reversible. Are you sure you want to do it?

Thank you for reporting a broken "Go to Material" link in MERLOT to help us maintain a collection of valuable learning materials.

If you feel this material is inappropriate for the MERLOT Collection, please click SEND REPORT, and the MERLOT Team will investigate. Thank you!

You are being taken to the material on another site. This will open a new window.

Do not show me this again