Thursday, October 20, 2016

The Taylor rule and how out of whack the Federal Reserve made our economy

"In economics, a Taylor rule is a monetary-policy rule that stipulates how much the central bank should change the nominal interest rate in response to changes in inflation, output, or other economic conditions. In particular, the rule stipulates that for each one-percent increase in inflation, the central bank should raise the nominal interest rate by more than one percentage point. This aspect of the rule is often called the Taylor principle..."

The bigger the artificial stimulant = The larger the snap back when the siht hits the fan;