Hey Everyone, this question was on one of the CFAI online exams, I use the Schweser books, and I am not sure where I can find this!! Thanks! The primary rule between the McCallum Rule and the Taylor Rule is that the McCallum rule follows the: A. Keynesian feedback rule and adjusts the federal funds rate to target the inflation rate B. Monetarist feedback rule and adjusts the federal funds rate to target the inflation rate C. Keynesian feedback rule and adjusts the growth rate of the monetary base to the target inflation rate D. Monetarist feedback rule and adjusts the growth rate of the monetary base to the target inflation rate
Oh my, I want to know too. I don’t even recall these terms being in the Schweser notes!
it’s D. Something to remember.
I don’t recall McCallum Rule and Taylor Rule even though I have an undergrad Econ degree.
page 773-775 parkin: McCallum: spirit of the Monetarist fixed rule but it is a feedback rule and might be called the new monetarist rule. adjusts the growth rate of monetary base to target the inflation rate derived from MV=PY Taylor: adjusts the fed funds rate to target inflation rate - spirit of the Keynesian feedback rule, but it is designed first and foremost to achieve price level stability. new Keynesian rule
page 156 in schweser
Thanks guys!! Yeah, D is the right answer…was caught off balance by “McCallum” and “Taylor”…it is called the ‘Quantity Theory of Money’ in the Schweser books…duuh!!!
Nope, sorry, my bad…read the wrong LOS!!! It is the 'feedback rule"