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John B. Taylor

Professor, Stanford University
Senior Fellow, the Hoover Institution

World-renowned and award-winning economist; expert on monetary policy.

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Biography

John B. Taylor is a world-renowned economist known for his research on the foundations of modern monetary theory and policy and his experience in international economics. He has an active interest in public policy and has served at various senior levels in government.

John has edited a new book on America's weak economy, Government Policies and the Delayed Economic Recovery, with his colleagues at the Hoover Institution Lee Ohanian and Ian J. Wright. This book examines some possible causes for the weak recovery and provides a framework for how policies should change to restore strong economic growth.

His previous book, First Principles: Five Keys to Restoring America’s Prosperity, examines the current policy issues and lays out a plan to rebuild America’s economic future. John's book was recently awarded the 2012 Hayek Prize. The book best 'reflects Nobel laureate Friedrich Hayek’s vision of economic and individual liberty.'

In Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, his research focuses on the causes and effects of the financial crisis, the impact of monetary policy rules, econometric techniques for evaluating policy, and international financial institutions.

A pioneer in developing new approaches to monetary policy, he proposed the Taylor Rule in 1993, which central banks have used since then to help determine interest rates. The Taylor Principle is widely credited with keeping economic performance stable for the past two decades: raise short-term interest rates to cool the economy when inflation or output become too high, lower rates when either falls too low.

John Taylor has held several senior positions in government.

For four years, he was Undersecretary of the Treasury for International Affairs during the first Bush administration. He has been a member of the President's Council of Economic Advisers and served as its senior economist. He was also a member of the Congressional Budget Office's Panel of Economic Advisers.

Taylor served as a member of the California Governor’s Council of Economic Advisors from 1996-98 and 2005-10.

John B. Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University and Bowen H. and Janice Arthur McCoy Senior Fellow at the Hoover Institution. He has served as the director of the Stanford Institute for Economic Policy Research (SIEPR) and was founding director of Stanford's Introductory Economics Center.

He has received several awards for his distinguished public service and won several teaching awards. John was awarded the 2010 Bradley Prize for outstanding achievement. He has contributed to The Wall Street Journal, Forbes, Financial Times, and The New York Times, and he's been a frequent guest on CNBC, FOX Business News, Tavis Smiley and Bloomberg TV.

Public Service & Economic Policy
For four years from 2001 to 2005, Taylor served as Undersecretary of Treasury for International Affairs, where he was responsible for U.S. policies in international finance, including currency markets, trade in financial services, foreign investment, international debt and development, and oversight of the International Monetary Fund and the World Bank. He was also responsible for coordinating financial policy with the G-7 countries, was chair of the working party on international macroeconomics at the OECD, and was a member of the Board of the Overseas Private Investment Corporation. His book Global Financial Warriors: The Untold Story of International Finance in the Post-9/11 World chronicles his years as head of the international division at Treasury.

He served as senior economist on President Ford's and President Carter’s Council of Economic Advisers in 1976 and 1977 and as a member of President George H.W. Bush's Council of Economic Advisers from 1989 through 1991. He was a member of the Congressional Budget Office's Panel of Economic Advisers from 1995 to 2001 and a senior economic adviser to the Bob Dole presidential campaign in 1996, the George W. Bush presidential campaign in 2000 and the John McCain campaign in 2008. He is currently a member of Governor Schwarzenegger’s Council of Economic Advisers.

Credentials

  • Mary and Robert Raymond Professor of Economics, Stanford University
  • Bowen H. and Janice Arthur McCoy Senior Fellow, Hoover Institution
  • Senior Fellow, Stanford Institute for Economic Policy Research (SIEPR)
  • Director, Introductory Economics Center, 1997-2001
  • Director, Stanford Institute for Economic Policy Research (SIEPR), 1994-97
  • Director, Monetary Policy and Macroeconomic Program (SIEPR), 1992-2001
  • Under Secretary for International Affairs, US Treasury, 2001-2005
  • President's Council of Economic Advisers, 1989-1991
  • President's Council of Economic Advisers, Senior Staff Economist, 1976-77
  • Advisory Panel, Congressional Budget Office, 1995-2001
  • Governor's Council of Economic Advisers (California), 1995-98, 2005-10
  • Federal Reserve Bank of Philadelphia, Research Adviser, 1981-84
  • Organization for Economics Cooperation and Development, Chair: Working Party on International Macroeconomics, 2003-2005
  • Bank of Japan, Honorary Adviser (1994-2001); Visiting Scholar (1987)
  • Bank of Finland, Visiting Scholar, 1986
  • National Bureau of Economic Research
  • Fellow, Econometrics Society
  • Fellow, American Academy of Arts and Sciences
  • Fellow, Guggenheim Foundation
  • Ph.D. in Economics, Stanford University; A.B. in Economics, Summa Cum Laude, Princeton University

Awards

  • 2012 Hayek Prize for First Principles
  • 2010 Bradley Prize
  • Adam Smith Award for contributions to economic research, National Association for Business Economics, 2007
  • George P. Schultz Public Service Award, Stanford University, 2005
  • Alexander Hamilton Award for leadership in international finance, US Treasury, 2005
  • Distinguished Service Award, US Treasury, for design and implementation of financial reconstruction in Iraq, 2004
  • Medal of the Oriental Republic of Uruguay, for design and implementation of financial measures to deal with the crisis of 2002
  • Two teaching awards: Lilian and Thomas B. Rhodes Prize, Laurence and Naomi Carpenter Hoagland Prize, Stanford University

Books

Government Policies and the Delayed Economic Recovery

Lee E. Ohanian, John B. Taylor, and Ian J. Wright (Editors)

The slow recovery from the recession of 2007–9 raises fundamental economic and public policy concerns. Government Policies and the Delayed Economic Recovery examines some possible causes of the weak recovery and presents empirical evidence that too much policy activism and other policy shortcomings have held back economic growth.



 The book examines a wide range of policies that have led to the delayed economic recovery, from increased regulation to ineffective programs that have driven up the public debt. Although their opinions are not always the same, together the contributors reveal a common theme: the delayed recovery has been due to the enactment of poor economic policies and the failure to implement good ones. The authors conclude their analysis by providing a framework for how policies should change to restore strong economic growth.

Hoover Institution Press; 1st Edition edition (September 2, 2012)

Praise

“This book presents the innovative and provocative explanations of highly distinguished and influential thinkers from the Hoover Institution and elsewhere,”
— Jeremy Bulow, the Richard Stepp Professor of Economics at the Graduate School of Business, Stanford University.

“This book is a fascinating mix of facts, opinions, formal models, and wise informal recommendations about what the government should do and should stop doing to accelerate the rate of recovery from the 2008 financial crisis. The book bristles with ideas, proposals, and rousing discussions. It is hard to put it down once you start reading it,”
— Thomas J. Sargent, Hoover Institution senior fellow and 2011 Nobel laureate in Economic Sciences

First Principles

Five Keys to Restoring America's Prosperity

John B. Taylor

Leading economist John B. Taylor’s straightforward plan to rebuild America’s economic future by returning to its founding principles.

America’s economic future is uncertain. Mired in a long crippling economic slump and hamstrung by bitter partisan debate over the growing debt and the role of government, the nation faces substantial challenges, exacerbated by a dearth of vision and common sense among its leaders. Prominent Stanford economist John B. Taylor brings his steady voice of reason to the discussion with a natural solution: start with the country’s founding principles of economic and political freedom — limited government, rule of law, strong incentives, reliance on markets, a predictable policy framework — and reconstruct its economic foundation from these proven principles. 

Channeling his high-level experience as both a policymaker and researcher, Taylor then zeroes in on current policy issues — the budget, monetary policy, government regulation, tax reform — and lays out in simple terms bold strategies designed to place the country on sound footing in each of these areas.

W. W. Norton & Company (January 23, 2012)

Getting Off Track

How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis

John B. Taylor

An Empirical Analysis Of What Went Wrong

Throughout history, financial crises have always been caused by excesses — frequently monetary excesses — which lead to a boom and an inevitable bust. In our current crisis it was a housing boom and bust that in turn led to financial turmoil in the United States and other countries. How did everything deteriorate so suddenly and dramatically? In Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, Hoover fellow and Stanford economist John B. Taylor offers empirical research to explain what caused the current financial crisis, what prolonged it, and what worsened it dramatically more than a year after it began.

The author tells how unusually easy monetary policy helped set the crisis in motion, as interest rates at the Federal Reserve and several other central banks deviated from historical regularities. He explains monetary interaction with the subprime mortgage problem, showing how the use of these mortgages, especially the adjustable-rate variety, led to excessive risk taking. In the United States this was encouraged by government programs designed to promote home ownership, a worthwhile goal but overdone in retrospect. Looking ahead, the author suggests a set of principles to follow to prevent misguided actions and interventions in the future.

Hoover Institution Press; 1 New edition (February 25, 2009)

Review

Taylor Rules — Forbes

Global Financial Warriors

The Untold Story of International Finance in the Post-9/11 World

John B. Taylor

“A valuable insider’s account of financial diplomacy in the Bush administration.”
— Jeffrey E. Garten, Washington Post

Sworn in as head of the U.S. Treasury Department’s international finance division just three months prior to 9/11, John B. Taylor soon found himself at the center of the war on terror. Global Financial Warriors takes you inside the White House Situation Room, to the meetings of the G7 finance ministers, and to cities worldwide as Taylor assembles a coalition to freeze terrorist assets, plans the financial reconstruction in Afghanistan, oversees the development of a new currency in Iraq, and deals with the spread of financial crises. From reforming the IMF and the World Bank to negotiating international agreements to reduce Iraq’s debt by 80 percent and cancel the debt of very poor countries, Taylor’s unparalleled access offers the reader an insider’s account of a pivotal time in international finance.

W.W. Norton & Co.; illustrated edition edition (January 17, 2008)

Inflation, Unemployment, and Monetary Policy

(Alvin Hansen Symposium Series on Public Policy)

Robert M. Solow, John B. Taylorl, and Benjamin M. Friedman (Editor)

The connection between price inflation and real economic activity has been a focus of macroeconomic research — and debate — for much of the past century. Although this connection is crucial to our understanding of what monetary policy can and cannot accomplish, opinions about its basic properties have swung widely over the years. Today, virtually everyone studying monetary policy acknowledges that, contrary to what many modern macroeconomic models suggest, central bank actions often affect both inflation and measures of real economic activity, such as output, unemployment, and incomes. But the nature and magnitude of these effects are not yet understood. In this volume, Robert M. Solow and John B. Taylor present their views on the dilemmas facing U.S. monetary policymakers. The discussants are Benjamin M. Friedman, James K. Galbraith, N. Gregory Mankiw, and William Poole. The aim of this lively exchange of views is to make both an intellectual contribution to macroeconmics and a practical contribution to the solution of a public policy question of central importance.

The MIT Press (January 30, 1999)

Subjects

John tailors each presentation to the needs of his audience and is not limited to the topics we have listed below. These are subjects that have proven valuable to customers in the past and are meant only to suggest his range and interests. Please ask us about any subject that interests you; we are sure that we can accommodate you.

The U.S. Economy — Recovering from the Great Recession

Videos

5 Keys to Restoring America's Prosperity

Reviews

A venture capital investment firm:
John — Thank you for speaking at the risk conference.

It was good for the audience to hear that one of the most important lessons from your work at the Treasury was to form teams with a clear sense of mission. You said something inspirational: we don’t only need people to know and understand the mission, we need them to internalize it.

Your talk on Macroeconomic Perspectives also gave the audience a good understanding on the challenges that the current administration is facing. Policy uncertainty is critical in the current market environment.

A global trade association for OTC derivatives:
He was fantastic; our crowd really enjoyed his talk.

Articles

Strong Push Back at Jackson Hole

— Economics One

The Road to Recovery

— City Journal
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