Economist Lee Says Taylor Can Be One of Best Fed Chairs

The video discusses the Taylor Rule as a guiding tool for monetary policy, emphasizing the importance of knowing when to apply it. It critiques John Taylor's potential as a Fed Chair, suggesting he may not be the best choice. The concept of the neutral real rate is explained, highlighting its role in achieving economic equilibrium. The video concludes by discussing how the neutral rate affects interest rates, suggesting that even with 2% inflation, nominal rates may not rise significantly.

What is the Taylor rule and why is it considered a guiding tool for the Federal Reserve?

According to the text, what are the circumstances under which the Taylor rule should not be followed exactly?

What implications does the text suggest about John Taylor's potential role as Fed chair?

What is meant by the 'neutral real rate' and how does it relate to the economy being in equilibrium?

How does inflation affect the nominal interest rate according to the discussion in the text?