why-does-the-federal-reserve-not-strictly-use-the-taylor-rule-to-set-the-federal

Question

Why does the Federal Reserve not strictly use the Taylor Rule to set the Federal Funds Rate?

Accepted Answer

Because it is a mathematical approximation and does not account for all economic variables.

Answer

Because it is not based on any economic theory.

Answer

Because it was never intended to be used in practice.

Answer

Because it is too complex to calculate.