If the Fed followed a rule for monetary policy, the time inconsistency problem would be eliminated.

Name: If the Fed followed a rule for monetary policy, the time inconsistency problem would be eliminated.
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Following a rule for monetary policy helps eliminate the time inconsistency problem by committing the Federal Reserve to a consistent policy over time, reducing the temptation to deviate for short-term benefits that could lead to long-term issues like inflation.

If the Fed Followed a Rule for Monetary Policy, the Time