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Chapter Four: Further Explanations

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Published: July 2, 2019

John Taylor answers frequently asked questions about monetary policy. When have central banks gone awry? Should the inflation target be raised? Is it always clear when central banks are following rules instead of discretion?

Video Recorded: August 20, 2018

Discussion Questions

  1. What makes monetary policy important?
  2. How does monetary policy relate to politics?
  3. What are the cost and benefits to society of central bank independence? 

Additional Readings

  • Read “Monetary Policy Rules Work and Discretion Doesn’t: A Tale of Two Eras” by John Taylor. Available here.
  • Read “The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong” by John Taylor. Available here.