ben s bernanke : john taylor ’ s contribution to monetary theory and policy opening remarks by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, to the conference on john taylor ’ s contribution to monetary theory and policy, federal reserve bank of dallas, dallas, texas ( via videoconference ), 12 october 2007. * * * it is a privilege for me to open this conference dedicated to our colleague and friend, john taylor. john's influence on monetary theory and policy has been profound indeed. that influence has been manifest in undergraduate lecture halls and graduate seminar rooms, in the best research journals, and in the highest ranks of government. his ability to crystallize important analytical insights and apply them to policy issues is unsurpassed. indeed, in a speech a few years ago, i noted three concepts named after john that are central to understanding our macroeconomic experience of the past three decades - - the taylor curve, the taylor rule, and the taylor principle ( bernanke, 2004 ). i'd like to take a few minutes to review john's career and impressive body of work. after receiving his ph. d. from stanford nearly thirty - five years ago, john began his career as an assistant professor at columbia university. even in those early years, john revealed his interest in applying the analytical tools of economics to practical policy issues. he took a leave of absence from academia in 1976 - 77 to serve on the staff of the council of economic advisers. i suspect that the circumstances of the mid - 1970s intensified john's motivation to help improve economic performance through sound policymaking. during the late 1970s and early 1980s, john published a number of highly influential papers, including : " conditions for unique solutions in stochastic macroeconomic models with rational expectations, " " estimation and control of a macroeconomic model with rational expectations, " " aggregate dynamics and staggered contracts, " and " solution and maximum likelihood estimation of dynamic nonlinear rational expectations models. " ( as you can tell, john has always had a penchant for catchy titles. ) beyond its important technical contributions, this work showed that the insights and methods of the rational expectations revolution could be applied to models with sticky wages and prices. that observation has proved enormously influential in subsequent policy research. the rational expectations revolution helped to kill the idea of a long - run tradeoff between the levels of inflation and unemployment. however, john's analysis showed that

stability ; ( 4 ) protect consumers ; and ( 5 ) promote a safe, efficient, inclusive, and innovative payment system. 6 the approach articulated in the guidelines is based on a foundation of risk management and mitigation, recognizing that access to fed accounts and services can create significant risks. the systematic evaluation of these different risks is intended to establish a framework ensuring similar treatment for legally eligible institutions with similar risk profiles across the reserve banks. for example, requests for accounts and services from non - federally insured institutions would generally be subject to a higher standard of review. the board expects reserve banks to collaborate on reviews of account and service requests, and conduct ongoing monitoring of approved accountholders, to ensure that the guidelines are implemented in a consistent manner. publishing the guidelines is an important step to providing transparency and consistency across the federal reserve system. however, more work remains to be completed before a process is established to fully implement the guidelines. in the meantime, there is a risk that the guidelines could establish false expectations regarding the timeline for evaluating and acting on these requests. in closing, i'd like to once again thank the venture center for hosting this event and for providing the opportunity to get together to discuss innovation in financial services. it's great to finally be back in little rock and to have the chance to meet so many of you in person after such a long time. commissioner marshall, i look forward to our discussion. 1 these remarks reflect my views and not necessarily those of my colleagues on the board of governors or the federal open market committee. i am grateful for the assistance of federal reserve board staff jeff ernst, kavita jain, molly mahar, jason hinkle, and kirstin wells in preparing these remarks. 2 board of governors of the federal reserve system, federal reserve publishes paper describing landscape of partnerships between community banks and fintech companies, news release, september 9, 2021. 3 board of governors of the federal reserve system, federal reserve board provides additional information for banking organizations engaging or seeking to engage in crypto - asset - related activities, news release, august 16, 2022. 4 86 fed. reg. 16, 837. 5 board of governors of the federal reserve system, money and payments : the u. s. dollar in the age of digital transformation ( pdf ), january 2022. t 6 board of governors of the federal reserve system, federal reserve board announces final guidelines that establish a transparent, risk - based, and consistent set of factors for