Author Archives: John Taylor
Not a Repeat of the Great Intervention
I am writing from Tokyo where I have spent a few days at the Bank of Japan. This week marked the first exchange market intervention by the Bank of Japan since March 16, 2004, a day I remember well because … Continue reading
Posted in Monetary Policy
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Proven Economic Principles
Today’s Wall Street Journal article by George Shultz, Michael Boskin, John Cogan, Allan Meltzer and me shows that the financial crisis, recession, and continued high unemployment have been caused by government policies that have deviated from proven economic principles. The … Continue reading
Posted in Teaching Economics
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Lehman Weekend
Two years ago, on Friday Sept 12, 2008, the Lehman Weekend began. Many people are still trying to figure out why the bailout of Lehman was aborted or what would have happened if there were a special bankruptcy chapter for … Continue reading
Posted in Financial Crisis
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Flying Back to Treasury on 9/11
I was in a hotel room in Tokyo when the first plane hit the World Trade Center. Recently sworn in as Under Secretary at Treasury, I was part of a delegation to Japan that included Paul O’Neill and many reporters, … Continue reading
Posted in International Economics
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Post-Crisis Changes in Principles of Economics Texts
Many have written about how the introductory economics textbook should change as a result of the crisis. In November 2008, one year after the crisis started, I addressed this question in a practical way when Mike Worls—economics editor at South-Western … Continue reading
Posted in Teaching Economics
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More on Massive Quantitative Easing
In tomorrow’s Wall Street Journal there is a symposium on monetary policy in which Richard Fisher, Rick Mishkin, Vince Reinhart, Allan Meltzer, Ron McKinnon and I participate. One of the points I make in my piece is that another massive … Continue reading
Posted in Monetary Policy
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Beyond GDP Measures Don’t Make the US Look Better
My colleagues Chad Jones and Pete Klenow have computed a new measure of economic welfare which combines consumption, leisure, mortality, and even inequality. Their new measure is closely correlated with GDP per capita as the attached diagram from their paper … Continue reading
Posted in Teaching Economics
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Got a New Idea for Monetary Policy?
Do you have a new proposal for monetary policy? Perhaps a new policy rule? If so, it would be good to try out your idea first on a model of the economy. See how it works. Better yet, since economic … Continue reading
Posted in Monetary Policy
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A Milton Friedman Revival
Bloomberg columnist Caroline Baum laments that monetarists have “followed Milton Friedman the grave.” Monetarist, of course, is a term used to identify those who agree with the ideas of the great free-market economist who died in 2006. But I see … Continue reading
Posted in Teaching Economics
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The Taylor Rule Does Not Say Minus Six Percent
The Taylor rule says that the federal funds rate should equal 1.5 times the inflation rate plus .5 times the GDP gap plus 1. Currently the inflation rate is about 1.5 percent and the GDP gap is about -5 percent … Continue reading
Posted in Monetary Policy
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Economics One 