John B. Taylor is the Mary and
Robert Raymond Professor of Economics
at Stanford University and
the Bowen H. and Janice Arthur
McCoy Senior Fellow at the Hoover
Institution. He is a member of the
California Governor’s Council of
Economic Advisors. Previously, he
was director, Stanford Institute for
Economic Policy Research, where he is now a senior fellow,
and was founding director of Stanford’s Introductory Economics
Center. Previously, he served on the President’s
Council of Economic Advisers, the Congressional Budget
Office’s Panel of Economic Advisers, and as Under Secretary
of Treasury for International Affairs. He held positions
as professor of economics at Princeton University and Columbia
University. His academic fields of expertise are
macroeconomics, monetary economics, and international
economics. He has won a number of awards for distinguished
public service, as well as for outstanding teaching.
He is a fellow of the American Academy of Arts and Sciences
and the Econometric Society and served as vice president
of the American Economic Association. He received a
B.A. in economics summa cum laude from Princeton University
and a Ph.D. in economics from Stanford University.
Over the past 20 years, the use of monetary policy rules
has become pervasive in analyzing and prescribing monetary
policy. This paper traces the development of such
rules and their use in the analysis, prediction, and stabilization
of national economies. In particular, rules provide
insight into eras in which monetary policy was not effective
as well as when it was, such as the persistence of the
ongoing “Great Moderation.” The paper stresses the “scientific”
contributions of rules, including their insight into
fluctuations of housing construction and exchange rates,
as well as into the term structure of interest rates.
This paper was delivered as the Adam Smith Award Lecture at the NABE Annual Meeting, September 10, 2007, San Francisco, California.
By John B. Taylor