Stanford University professor John Taylor, of “Taylor Rule” fame, gave a thought-provoking speech at the NBER Macro Annual Meeting in May that is well worth your attention. Taylor is certainly no hack, so his views must be confronted as we assess the causes of the current financial crisis and the government’s responses to it.
This speech will be particularly instructive for those who think that the financial crisis was largely caused by greed-induced mistakes in the private sector and/or that the government needed to take strong action after the crisis started to avoid what Taylor calls “Great Depression 2.0” (you know who you are, my old friend!).
Here are Arnold Kling’s thoughts on Taylor’s speech over at EconLog.
And I bet Professor Eisner will have something for us in the comments.