New Books in Economics
Monetary economics, the Taylor Rule, fiscal policy, and economic growth
Oct 21, 2023
John Taylor, Professor of Economics at Stanford University and Senior Fellow at the Hoover Institution, discusses his interest in economics, his contributions to monetary economics including the Taylor Rule, views on monetary policy in the US, Europe, and Japan, fiscal policy, and economic growth.
32:42
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Quick takeaways
- Implementing rules-based monetary policies, such as the Taylor Rule, can lead to more effective and predictable monetary policy.
- Sound fiscal policy, including sustainable deficits and international coordination, is crucial for achieving economic stability and long-term fiscal sustainability.
Deep dives
The Importance of Monetary Policy Rules
John Taylor discusses the importance of implementing rules-based monetary policies. He highlights that having a clear framework for central banks to follow, such as the Taylor Rule, can lead to more effective and predictable monetary policy. The rule, which focuses on variables such as inflation rate and GDP gap, provides guidance for determining interest rates and helps anchor expectations. Taylor emphasizes that simple rules-based policies can be more beneficial than complex and discretionary approaches.
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