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Under a conventional policy rule, a central bank adjusts its policy rate linearly according to the gap between … central bank controls inflation aggressively when inflation is far from its target, but concentrates more on output …
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The Federal Reserve's muddled mandate to attain simultaneously the incompatible goals of maximum employment and price stability invites short-term-oriented discretionary policymaking inconsistent with the systematic approach needed for monetary policy to contribute best to the economy over time....
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