Twenty years ago, John Taylor proposed a simple idea to guide monetary policy. Quickly the idea spread, not only through academia, but also to the trading floors of Wall Street and the Federal Reserve's boardroom in Washington. Now, two decades later, the Taylor rule remains a focal point for discussions of monetary policy around the world.
In The Taylor Rule and the Transformation of Monetary Policy, a veritable contributors' ""who's who"" from the academic and policy communities explain and provide perspectives on John Taylor's revolutionary thinking about monetary policy. From the Great Inflation of the 1970s through the Great Moderation of the 1980s and 1990s to the Great Deviation following the 2001 recession, the contributors analyse Taylor's influences on monetary theory and policy around the world. They explore some of the literature that Taylor inspired and help us understand how the new ways of thinking that he pioneered have influenced actual policy here and abroad.
Evan F. Koenig is vice president and senior policy adviser at the Federal Reserve Bank of Dallas and an adjunct professor at Southern Methodist University. Robert Leeson is a visiting professor of economics at Stanford University, a visiting fellow at the Hoover Institution, and an adjunct professor at Notre Dame Australia University. George Kahn is vice president and economist at the Federal Reserve Bank of Kansas City.
Preface by Richard W. Fisher Introduction by Evan F. Koenig, Robert Leeson, and George A. Kahn I. TAYLOR\u2019S APPROACH TO MONETARY THEORY AND POLICY 1. Monetary Policy Rules: from Adam Smith to John Taylor by Pier Francesco Asso, Robert Leeson 2. The Taylor Rule and the Practice of Central Banking by George A. Kahn 3. A Comparison with Milton Friedman by Edward Nelson 4. Two Basic Principles by Robert E. Lucas II. FROM THE GREAT MODERATION TO THE GREAT DEVIATION 5. The Great Moderation by Ben S. Bernanke 6. The Great Deviation by John B. Taylor 7. It\u2019s Not So Simple by Donald L. Kohn III. NEW CHALLENGES IN THE DECADE AHEAD 8. Forecast Targeting as a Monetary Policy Strategy: Policy Rules in Practice by Michael Woodford 9. The Dual Nature of Forecast Targeting and Instrument Rules by John B. Taylor 10. Evaluating Monetary Policy by Lars E. O. Svensson IV. TAYLOR\u2019S INFLUENCE ON POLICYMAKING: FIRSTHAND ACCOUNTS 11. Overview by Ben S. Bernanke 12. The View from Inside the Fed by Janet Yellen 13. The View from Inside the European Central Bank by Otmar Issing 14. The View from Central Banks in Emerging Markets by Guillermo Ortiz 15. A View from the Financial Markets by John P. Lipsky APPENDIX The Pursuit of Policy Rules: A Conversation between Robert Leeson and John B. Taylor About the Contributing Authors Index