John B. Taylor
John Taylor | |
---|---|
Under Secretary of the Treasury for International Affairs | |
In office 2001–2005 | |
President | George W. Bush |
Preceded by | Timothy Geithner |
Succeeded by | Timothy D. Adams |
Personal details | |
Born | John Brian Taylor December 8, 1946 Yonkers, New York, U.S. |
Political party | Republican |
Education | Princeton University (BA) Stanford University (PhD) |
Academic career | |
Institutions | Stanford University Hoover Institution Columbia University |
Field | Monetary economics |
School or tradition | New Keynesian economics |
Doctoral advisor | Theodore Wilbur Anderson[1] |
Doctoral students | Lawrence J. Christiano |
Influences | Milton Friedman Paul Volcker E. Philip Howrey Alan Greenspan |
Contributions | Taylor rule |
Information at IDEAS / RePEc | |
John Brian Taylor (born December 8, 1946) is the Mary and Robert Raymond Professor of Economics at
He taught at
In research published in 1979 and 1980 he developed a model of price and wage setting—called the
In 2012 he was included in the
Early life and education
Born in
Academic contributions
Taylor's research—including the staggered contract model, the Taylor rule, and the construction of a policy tradeoff (Taylor) curve[12] employing empirical rational expectations models[13]—has had a major impact on economic theory and policy.[14] Former Federal Reserve Chairman Ben Bernanke has said that Taylor's “influence on monetary theory and policy has been profound,”[15] and Federal Reserve Chair Janet Yellen has noted that Taylor's work “has affected the way policymakers and economists analyze the economy and approach monetary policy."[16]
Taylor contributed to the development of mathematical methods for solving macroeconomic models under the assumption of rational expectations, including in a 1975 Journal of Political Economy paper, in which he showed how gradual learning could be incorporated in models with rational expectations;[17] a 1979 Econometrica paper in which he presented one of the first econometric models with overlapping price setting and rational expectations,[18] which he later expanded into a large multicountry model in a 1993 book Macroeconomic Policy in a World Economy,[13] and a 1983 Econometrica paper,[19] in which he developed with Ray Fair the first algorithm to solve large-scale dynamic stochastic general equilibrium models which became part of popular solution programs such as Dynare and EViews.[20]
In 1977, Taylor and
Taylor then developed the
Taylor's research on monetary policy rules traces back to his undergraduate studies at Princeton.[27][28] He went on in the 1970s and 1980s to explore what types of monetary policy rules would most effectively reduce the social costs of inflation and business cycle fluctuations: should central banks try to control the money supply, the price level, or the interest rate; and should these instruments react to changes in output, unemployment, asset prices, or inflation rates? He showed[29] that there was a tradeoff—later called the Taylor curve[30]—between the volatility of inflation and that of output. Taylor's 1993 paper in the Carnegie-Rochester Conference Series on Public Policy proposed that a simple and effective central bank policy would manipulate short-term interest rates, raising rates to cool the economy whenever inflation or output growth becomes excessive, and lowering rates when either one falls too low.[6] Taylor's interest rate equation has come to be known as the Taylor rule, and it is now widely accepted as an effective formula for monetary decision making.[31]
A key stipulation of the Taylor rule, sometimes called the Taylor principle,[32] is that the nominal interest rate should increase by more than one percentage point for each one-percent rise in inflation. Some empirical estimates indicate that many central banks today act approximately as the Taylor rule prescribes, but violated the Taylor principle during the inflationary spiral of the 1970s.[33]
Recent research
Taylor's recent research has been on the financial crisis that began in 2007 and the
Taylor's research has also examined the impact of fiscal policy in the recent recession. In November 2008, writing for
In a June 2011 interview on Bloomberg Television, Taylor stressed the importance of long term fiscal reform that sets the U.S. federal budget on a path towards being balanced. He cautioned that the Fed should move away from quantitative easing measures and keep to a more static, stable monetary policy. He also criticized fellow economist Paul Krugman's advocacy of additional stimulus programs from Congress, which Taylor said will not help in the long run.[41] In his 2012 book First Principles: Five Keys to Restoring America’s Prosperity, he endeavors to explain why these reforms are part of a broader set of principles of economic freedom.
Selected publications
- Taylor, John B. (October 1975). "Monetary policy during a transition to rational expectations". S2CID 8603588.
- Taylor, John B.; Phelps, Edmund S. (February 1977). "Stabilizing powers of monetary policy under rational expectations". S2CID 14729818.
- Taylor, John B. (May 1979). "Staggered wage setting in a macro model". JSTOR 1801626.
- Reprinted in Taylor, John B. (1991), "Staggered wage setting in a macro model", in Mankiw, N. Gregory; Romer, David (eds.), New Keynesian economics, volume 1, Cambridge, Massachusetts: MIT Press, pp. 233–42, ISBN 9780262631334.
- Reprinted in Taylor, John B. (1991), "Staggered wage setting in a macro model", in Mankiw, N. Gregory; Romer, David (eds.), New Keynesian economics, volume 1, Cambridge, Massachusetts: MIT Press, pp. 233–42,
- Taylor, John B. (September 1979). "Estimation and control of a macroeconomic model with rational expectations". JSTOR 1911962.
- Taylor, John B. (December 1980). "Scale economies, product differentiation, and the pattern of trade".
- Taylor, John B. (1986), 'New econometric approaches to stabilization policy in stochastic models of macroeconomic fluctuations'. Ch. 34 of Handbook of Econometrics, vol. 3, Z. Griliches and M.D. Intriligator, eds. Elsevier Science Publishers.
- Taylor, John B. (December 1993). "Discretion versus policy rules in practice".
- Taylor, John B. (1999), "An historical analysis of monetary policy rules", in Taylor, John B. (ed.), Monetary policy rules, Chicago: University of Chicago Press, ISBN 9780226791265.
- Taylor, John B. (2007). Global financial warriors: the untold story of international finance in the post-9/11 world. New York: W.W. Norton. ISBN 9780393064483.
- Taylor, John B. (2008), "Housing and monetary policy", in Reserve Bank of Kansas City (ed.), Housing, housing finance, and monetary policy: a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 30-September 1, 2007, Kansas City, Missouri: Reserve Bank of Kansas City, pp. 463–76, OCLC 170267547
- Taylor, John B. (2009), "The financial crisis and the policy response: an empirical analysis of what went wrong", in Bank of Canada Staff (ed.), Festschrift in honour of David Dodge's contributions to Canadian public policy: proceedings of a conference held by the Bank of Canada, November, 2008, Ottawa: Bank of Canada, pp. 1–18, ISBN 9780660199276.
- Taylor, John B. (2009). Getting off track: how government actions and interventions caused, prolonged, and worsened the financial crisis. Stanford, California: Hoover Institution Press. ISBN 9780817949716.
- Taylor, John B.; ISBN 9780817911287.
- Taylor, John B.; Ryan, Paul D. (30 November 2010). "Refocus the Fed on price stability instead of bailing out fiscal policy". Investor's Business Daily. Archived from the original on 13 April 2011.
- Taylor, John B. (2012). First principles: five keys to restoring America's prosperity. New York: W.W. Norton. ISBN 9780393345452.
See also
- Members of the Hoover Institution
- Members of Stanford University's Economics Department
Further reading
- Libich, Jan; Nguyen, Dat Thanh; Stehlík, Petr (December 2015). "Monetary exit and fiscal spillovers" (PDF).
References
- ^ Taylor, John B. (September 24, 2016). "The Statistical Analysis of Policy Rules". economicsone.com. Economics One (A blog by John B. Taylor). Retrieved October 2, 2016.
- ^ "Hoover Institution Senior Fellow: Biography". Hoover Institution. Retrieved 27 October 2011.
- ^ Taylor, John B. "Curriculum vitae" (PDF). Stanford University.
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(help) - JSTOR 1801626.
- Reprinted in Taylor, John B. (1991), "Staggered wage setting in a macro model", in Mankiw, N. Gregory; Romer, David (eds.), New Keynesian economics, volume 1, Cambridge, Massachusetts: MIT Press, pp. 233–242, ISBN 9780262631334.
- Reprinted in Taylor, John B. (1991), "Staggered wage setting in a macro model", in Mankiw, N. Gregory; Romer, David (eds.), New Keynesian economics, volume 1, Cambridge, Massachusetts: MIT Press, pp. 233–242,
- S2CID 154446910.
- ^
- ISBN 9780393064483.
- ^ "Hall of 'citation laureates' (in economics)". science.thomsonreuters.com. Thomson-Reuters. Archived from the original on 2011-12-02. Retrieved 2011-09-29.
- ^ "Past Presidents - The Mont Pelerin Society". www.montpelerin.org. Retrieved 2023-10-22.
- ^ "Notable alumni". shadysideacademy.org. Shady Side Academy.
- ^ Taylor, John Brian. Princeton University. Department of Economics (ed.). "Fiscal and Monetary Stabilization Policies in a Model of Cyclical Growth".
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- Reprinted in Taylor, John B. (1981), "Estimation and control of a macroeconomic model with rational expectations", in Lucas, Jr., Robert E.; Sargent, Thomas J. (eds.), Rational expectations and econometric practice, Minneapolis: University of Minnesota Press, ISBN 9780816610983.
- Reprinted in Taylor, John B. (1981), "Estimation and control of a macroeconomic model with rational expectations", in Lucas, Jr., Robert E.; Sargent, Thomas J. (eds.), Rational expectations and econometric practice, Minneapolis: University of Minnesota Press,
- ^ ISBN 9780393963168.
- ^ Ben Bernanke refers to the “three concepts named after John that are central to understanding our macroeconomic experience of the past three decades—the Taylor curve, the Taylor rule, and the Taylor principle.” in “Opening Remarks,” Conference on John Taylor’s Contributions to Monetary Theory and Policy
- ^ Bernanke, Ben (2007). Opening Remarks. Remarks at the Conference on John Taylor's Contributions to Monetary Theory and Policy.
- ^ Yellen, Janet (2007). Policymaker Roundtable (PDF). Remarks at the Conference on John Taylor's Contributions to Monetary Theory and Policy.
- S2CID 8603588.
- JSTOR 1911962.
- S2CID 122888958.
- ISBN 9781280163388and “Eviews Users Guide II.”
- S2CID 14729818.
- S2CID 154301791.
- ISBN 9780130557872.
- ISBN 9783319175782.
- ISBN 9780226791265.
- ISBN 9780444501585.
- ^ Taylor, John B. (April 1968). Fiscal and monetary stabilization policies in a model of endogenous cyclical growth (BA thesis). Princeton University.
- OCLC 22687344.
- JSTOR 1911962.
- ^ Bernanke, Ben (2004). The Great Moderation. Remarks at the meeting of the Eastern Economic Association.
- ^ Orphanides, Athanasios (2007). Taylor rules (PDF). Finance and Economics Discussion Series 2007–18. Federal Reserve Board.
- JSTOR 30035014.
- OCLC 170267547
- ISBN 9780660199276.
- ^ Taylor, John B. (February 9, 2009). "How government created the financial crisis". The Wall Street Journal. p. A19. Pdf.
- ^ Taylor, John B. (November 25, 2008). "Why permanent tax cuts are the best stimulus". The Wall Street Journal. Retrieved June 30, 2011.
- S2CID 14892522.
- Washington Post. June 27, 2011. Archived from the originalon November 12, 2012. Retrieved June 30, 2011.
External links
- Taylor's Official Web Site
- Taylor's blog
- Stanford Economics Faculty Profile
- Conference to celebrate the tenth anniversary of the Taylor rule proposal
- Fed Conference on John Taylor’s Contributions to Monetary Theory and Policy
- Library of Economics and Liberty.
- Appearances on C-SPAN
- John B. Taylor publications indexed by Google Scholar