Author Archives: John Taylor
Investment and Unemployment over Longer Periods of Time
Like Paul Krugman, Justin Wolfers also wrote yesterday about my blog post of January 14 on the correlation between investment and unemployment. Wolfers argues that the relationship did not exist in earlier years. He is wrong. His argument is based … Continue reading
Posted in Fiscal Policy and Reforms
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Investment and Unemployment: A Reply
Paul Krugman wrote a post yesterday afternoon and another one last evening on a January 14 post of mine. In the Janaury post I pointed out the strong correlation between total fixed investment as a share of GDP and the … Continue reading
Posted in Regulatory Policy
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A Good Exit Strategy Proposed by Philadelphia Fed President Plosser
Last Friday in New York, Charles Plosser, President of the Philadelphia Fed, proposed an exit strategy for the Fed. It’s the first explicit exit strategy to be put forth by a member of the FOMC, so it deserves careful consideration … Continue reading
Posted in Monetary Policy
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Misunderstanding Prescriptive Versus Descriptive Monetary Policy Rules
Monetary policy rules can be used both for prescriptive and descriptive purposes, but it’s important to be clear about which purpose one has in mind. A policy rule estimated over a period which included the Great Inflation of the 1970s, … Continue reading
Posted in Monetary Policy
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Blogging Blocked in Beijing
One of the things I like most about blogging is that I can post from anywhere in the world—Tokyo, Milan, Washington—not just from my home or office at Stanford. Well not exactly. This past week I could not post from … Continue reading
Posted in International Economics
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Why the Stimulus Failed to Boost Infrastructure in the US: A Comparison With China
The data are now clear. Despite its large size, the 2009 U.S. stimulus package failed to increase government infrastructure spending or other government purchases as its promoters had claimed it would. The large federal stimulus grants sent to state and … Continue reading
Posted in Stimulus Impact
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Straightjackets and “We Rule” Shirts
David Wessel writes about the “straitjacket” of a one-size-fits-all monetary policy in his Wall Street Journal column this week. He shows why a single interest rate set by the European Central Bank is not necessarily appropriate for all the countries … Continue reading
Posted in Monetary Policy
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Evaluating TARP
Today’s TARP hearing at Senate Banking follows a slew of recent reports. The Congressional Oversight Panel (COP) issued its final report yesterday. Economists Simon Johnson, Allan Meltzer, Joe Stiglitz, and Luigi Zingales submitted testimony to COP two weeks ago. The … Continue reading
Posted in Regulatory Policy
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A Credible First Step Toward a New Budget Strategy?
Last week the Senate voted down the House proposal (HR1) to slow the growth of spending in the current fiscal year 2011. Now alternative plans are being laid to slow the growth of spending in 2011 by roughly the same … Continue reading
Posted in Budget & Debt
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Costs of the New Government Activism
In “Activism,” a paper soon to be published by International Finance and already posted at the Council on Foreign Relations, Alan Greenspan delves into the consequences of the recent surge of what he describes as “government activism, as represented by … Continue reading
Posted in Fiscal Policy and Reforms
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Economics One 