Author Archives: John Taylor

The Incredible Shifting Model

Robert Tetlow has published a fascinating research paper in the International Journal of Central Banking on policy robustness with the Fed’s FRB/US model. Perhaps the most important part of the paper is his careful documentation of the enormous shifts in the coefficients … Continue reading

Posted in Monetary Policy

Seeking a Way through the Fog of a Currency War

Many have speculated on the nature of, and the reasons for, the exchange rate regime change in China last week. While the central bank has issued press statements and answered questions about it intentions, it is useful to look at … Continue reading

Posted in International Economics

On Why The Economist Should Rule Rules In, Not Out

An old, but forever crucial, question for monetary policy is whether it should be rules-based or purely discretionary. The Economist, in a Free Exchange article this week with the title “Rule It Out,” goes all in for pure discretion, abandoning … Continue reading

Posted in Monetary Policy

Other Economic Lessons the US Can Learn from Greece

Last week the Senate Foreign Relations Subcommittee on Europe and Regional Security Cooperation held a hearing for which I was asked to address the lessons that the United States can learn from the Greek financial crisis.  One obvious lesson is … Continue reading

Posted in Financial Crisis, Regulatory Policy, Slow Recovery

Make Failure Feasible and End “Too Big To Fail”

Today the Senate held a hearing on a bankruptcy reform proposal which would address the problem of too-big-to-fail head on. The reform applies to large financial firms and makes failure feasible under clear rules without systemic spillovers thereby greatly reducing … Continue reading

Posted in Financial Crisis, Regulatory Policy

Does the Fed Have a Monetary Policy Strategy?

The subject of a monetary policy strategy for the Fed came up in Congressional hearings I testified at today and last week.  Today the hearing focussed on the bill to require the Fed to describe its strategy or rule for the systematic … Continue reading

Posted in Monetary Policy

A Deal and a Step to International Monetary Reform

I make the case in this Wall Street Journal piece and in more detail in Congressional testimony that there’s an opportunity for a deal between the Congress and the Administration on international monetary reform.  The case starts with perhaps the … Continue reading

Posted in Financial Crisis, International Economics