One advantage of inflation targeting over the Taylor rule is that with inflation targeting, because the public knows the target in advance, uncertainty is reduced.

Question

Quizplus · Accepted Answer

Inflation targeting communicates clear goals and expectations to the public, which reduces uncertainty and improves transparency. The Taylor rule, on the other hand, is based on a formula that may be subject to revision or interpretation, which can create uncertainty for the public.

One Advantage of Inflation Targeting Over the Taylor Rule Is