Read the article "Getting Back on Track: Macroeconomic Policy Lessons from the Financial Crisis" (which can be found at
https://research.stlouisfed.org/publications/review/10/05/Taylor.pdf) and answer the following questions:
Q1. What was the Great Moderation? When did it begin and end? According to Taylor, why did it end?
Q2. Why does Taylor argue that monetary excesses led to the financial crisis and the Great Recession? What evidence dose he offer to support his claim?
Q3. What does Taylor think the crisis was misdiagnosed as? Why does he think that the Fed misdiagnosed financial crisis?
Q4. Why was the Troubled Asset Relief Program (TARP) created? How does Taylor's discussion of TARP support his views that government interventions did a great deal of harm
Q5. What does Taylor see as the long-term legacies of the monetary and fiscal policy interventions to deal with the financial crisis? What does he recommend for getting monetary policy back on track
Source: ' Getting Back on Track: Macroeconomic Policy Lessons from the Financial Crisis John B. Taylor, review, Federal Reserve Bank of St. Louis, May/June 2010, 165-76