Could the Taylor Rule Have Prevented The Housing Bubble?

Mateusz Machaj, PhD in economics, is a founder of the Polish Ludwig von Mises Institute [This is a transcript from the September 22, 2014 episode of the Tom Woods Show, featuring Mateusz Machaj, former Summer Fellow at the Mises Institute, and founder of the Mises Institute of Poland.] Thomas Woods: The Taylor rule has been cited for so long by so many people who describe themselves as free-market economists that it has become more or less the conventional wisdom that the Taylor rule is a good guide for the central bank in formulating monetary policy. Let’s start off by explaining…