Keeping the world's largest economy on an even keel is a complicated job so it seemed fitting that Federal Reserve Chairman Ben Bernanke offered some kind words to a man who has helped make that work a little easier.
Bernanke, in remarks prepared for delivery Friday to a Dallas conference, praised the contributions of Stanford University economics professor John Taylor. Taylor's research has produced some recommendations, or benchmarks, that Bernanke and other central bankers can look to when deciding the best level of short-term interest rates for achieving the goals of economic stability and low inflation.
"John has emphasized that the Taylor rule should not be applied mechanistically. The world is far too complicated for that," Bernanke said in remarks delivered by video link to the Federal Reserve Bank of Dallas.
"But he has argued that such rules can serve as useful benchmarks for the practical conduct of monetary policy," Bernanke added. "In fact, policymakers at the Federal Reserve and many other central banks do routinely consult various policy rules as they make judgments on the appropriate stance of monetary policy."
In his remarks, Bernanke did not discuss the Fed's next move on interest rates or the current state of the economy.
To prevent the ill effects of a credit crunch from dangerously sickening the economy, the Fed sliced a key interest rate by one-half percentage point to 4.75% on Sept. 18. It marked the first cut to this important rate in more than four years.
At this point, there are mixed views about whether the Fed will lower rates again at its next meeting, Oct. 30-31.
Taylor, who received a doctorate in economics from Stanford in 1973, has spent years teaching and has worked as a policymaker in Washington. He served as President Bush's point man on international matters at the Treasury Department from 2001 to 2005.