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John Taylor's Contributions to Monetary Theory and Policy

Federal Reserve Bank of Dallas
October 12–13, 2007

Lawrence Christiano, Northwestern University
Evan F. Koenig, Federal Reserve Bank of Dallas
Robert Leeson, Hoover Institution and Stanford University
Andrew Levin, Federal Reserve Board

John Taylor has had an enormous impact on how we think about monetary policy and the channels through which it affects the economy. His notion of a trade-off between the variability of inflation and of output (the Taylor Curve), his approach to modeling nominal rigidities (Taylor contracts), and his characterization of how policy has been and ought to be conducted (the Taylor Rule and associated Taylor Principle) have each had an influence that has proven to be enduring and pervasive. These and other contributions were the subject of a conference that was hosted by the Federal Reserve Bank of Dallas on October 12 and 13, 2007.

About the Speakers PDF


Friday, October 12

8:10 a.m.

Opening Remarks off-site
Fed Chairman Ben S. Bernanke (videoconference)

8:25 a.m.

President Richard W. Fisher

8:30 a.m.

Looking Back: Historical Perspective on Policy Rules


Monetary Policy Rules from Adam Smith to Taylor PDF
Francesco Asso, George Kahn and Robert Leeson


Friedman and Taylor on Monetary Policy Rules: A Comparison PDF
Presentation PDF
Commentator: Edward Nelson

9:15 a.m.

Staggered Wage/Price Setting and Nominal Rigidities


Two Versions of John Taylor's Model of Nominal Price Adjustments PDF
Presentation PDF
Bennett T. McCallum


New Micro Evidence on Price Rigidities
Presentation PDF
Martin Eichenbaum, Nir Jaimovich and Sergio Rebelo


Presentation PDF
Commentator: Frank Smets

11:00 a.m.

The Design of Monetary Policy


Optimal Monetary Policy in a Model with Distinct Core and Headline Inflation Rates PDF
Presentation PDF
Martin Bodenstein, Chris Erceg and Luca Guerrieri


Macroeconometric Equivalence, Microeconomic Dissonance, and the Design of Monetary Policy PDF
Andrew Levin, Edward Nelson, David López-Salido and Tack Yun


Presentation PDF
Mark Gertler

12:30 p.m.



Remarks by Robert E. Lucas Jr. PDF

1:45 p.m.

Globalization and Monetary Policy


Reflections on Monetary Policy Choices in the Open Economy: Implications from an Optimizing Model PDF
Richard Clarida


Worldwide Macroeconomic Stability and Monetary Policy Rules PDF
Presentation PDF
James Bullard and Aarti Singh


Prakash Loungani

3:30 p.m.

Policy Rules and Financial Markets


Examining the Bond Premium Puzzle with a DSGE Model PDF
Presentation PDF
Glenn Rudebusch and Eric Swanson


Taylor Rules with Real-Time Data: A Tale of Two Countries and One Exchange Rate
Presentation PDF
Tanya Molodtsova, Alex Nikolsko Rzhevskyy and David Papell


Commentator: Monika Piazzesi

5:00 p.m.

Policy Roundtable


Rules and Discretion PDF
Lawrence Christiano


John Taylor and the Theory and Practice of Central Banking—Some Reflections PDF
Otmar Issing


Guillermo Ortiz

  Policymakers Roundtable PDF
Janet Yellen

Moderator: Richard W. Fisher

6:30 p.m.


7:00 p.m.



John Taylor Rules off-site
Remarks by Fed Vice Chairman Donald L. Kohn

Saturday, October 13

8:30 a.m.

Learning and Uncertainty


Central Bank Misperceptions and the Role of Money in Interest-Rate Rules PDF
Presentation Powerpoint
Guenter W. Beck and Volker Wieland


Learning, Expectations Formation, and the Pitfalls of Optimal Control Monetary Policy PDF
Presentation PDF
Athanasios Orphanides and John Williams


Fiscal and Monetary Policy Interactions
Presentation PDF
Christopher A. Sims

10:30 a.m.

Wage and Price Contracts and Bargaining


Equilibrium Sticky Prices PDF
Presentation PDF
Robert E. Hall


Minimally Altruistic Wages and Unemployment in a Matching Modeloff-site
Presentation PDF
Julio J. Rotemberg


Presentation PDF
Alexander L. Wolman


Looking Ahead


Forecast Targeting as a Monetary Policy Strategy: Policy Rules in Practice PDF
Michael Woodford


The Dual Nature of Forecast Targeting and Instrument Rules: A Comment on Michael Woodford’s “Forecast Targeting as a Monetary Policy Strategy: Policy Rules in Practice”PDF
Presentation PDF
John B. Taylor

12:45 p.m.

Lunch and Adjourn


Remarks by John Lipsky


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