But the prescription offered by the Taylor rule changes significantly if one instead assumes, as I do, that appreciable slack still remains in the labor market, and that the economy’s equilibrium real federal funds rate – that is, the real rate consistent with the economy achieving maximum employment and price stability over the medium term – is currently quite low by historical standards.
It also generates awareness and willingness to approach the grievance redressal system available, in case of disputes. 7. At a macroeconomic level, the cost of financial illiteracy is significant and is manifested through scourges such as unemployment, poverty, high personal indebtedness and financial exploitation through mis-selling. It results in avoidable leakages and wastages, which any resource-scarce country can ill-afford.