September 22, 2014 – Mateusz Machaj of the University of Wroclaw dismantles the fashionable “Taylor Rule” for guiding Fed policy.
For those who don’t know what the “Taylor Rule” is, it as introduced some time ago by a professor as the proper guide for the Federal Reserve when setting monetary policy (interest rates). The claim is that if the Fed had followed the “Taylor Rule,” we wouldn’t have had the housing boom and subsequent bust.
There are some mildly free-market people out there that think the “Taylor Rule” is a good idea. Are you among them, or do you agree with Machaj’s perspective? Tune in and share your response!