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Finance Dictionary and Glossary of Investment Terms
Taylor''s Rule
Definition 1.
A guideline for interest rate manipulation. It was introduced by Stanford economist John Taylor in order to set and adjust prudent rates that will stabilize the economy in the short-term and still maintain long-term growth. This rule is based on 3 factors: 1) Actual versus targeted inflation levels2) Actual employment versus full employment levels3) The appropriate short-term interest rate consistent with full employment.
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