The Taylor rule predicted federal funds rate (in the text) was derived from which of the following equations?
A) $i _ { t } = 1 \% + 1.5 \pi _ { t } + 0.5 \tilde { Y } _ { t }$
B) $i _ { t } = 1 \% - 0.5 u _ { t }$
C) $i _ { t } = \pi _ { t } + R _ { t }$
D) $i _ { t } = \bar { a } - \bar { m } \tilde { Y }$
E) $i _ { t } = \pi _ { t } + \tilde { Y } _ { t }$

Question

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The Taylor rule is typically represented by the equation $i _ { t } = r^* + \pi _ { t } + 0.5 (\pi _ { t } - \pi^* ) + 0.5 \tilde { Y } _ { t }$, which simplifies to $i _ { t } = 1 \% + 1.5 \pi _ { t } + 0.5 \tilde { Y } _ { t }$ when assuming a neutral real interest rate of 1% and a target inflation rate of 2%.

The Taylor Rule Predicted Federal Funds Rate (In the Text) it=1%+1.5πt+0.5Y~ti _ { t } = 1 \% + 1.5 \pi _ { t } + 0.5 \tilde { Y } _ { t }it​=1%+1.5πt​+0.5Y~t​

The Taylor Rule Predicted Federal Funds Rate (In the Text) $i _ { t } = 1 \% + 1.5 \pi _ { t } + 0.5 \tilde { Y } _ { t }$