John Taylor the Republican contradicts John Taylor the economist


[Title amended to copy Noah Smith’s catchier tweet of this post]

I am just back from a conference on uncertainty hosted by the Federal Reserve Bank of Dallas.  John Taylor spoke over lunch about what he thought the causes of the crisis were, and what would improve policy now, articulating a view he has made many times now.  (For example, here).   His basic diagnosis is:  the principal cause of the crisis was interest rates being too low during the early 2000s, as indicated by deviating below what the Taylor Rule would have recommended.  He acknowledged that fiscal uncertainty was weighing against the economy, but argued that that was because of the Obama stimulus package of early 2009, which was a departure from ‘predictable’ and sound fiscal policy.  He also explained that he thought QE was creating economic uncertainty, and that the world would be better without it. …

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