In 2013, John Taylor wrote: "I realize that there are differences of opinion about what is the best rule to guide policy and that some at the Fed (including Janet Yellen) now prefer a rule with a higher coefficient [on the output gap]."
a. If Fed policy were guided by a Taylor rule with a coefficient of 1, rather than 0.5, on the output gap, would the federal funds rate be higher or lower during a recession? Briefly explain.
b. Why might economists and policymakers disagree over the best rule to guide monetary policy?