Stanford University Professor John Taylor, a supporter of Republican presidential candidate Mitt Romney, said that a return to the gold standard isn’t the best way to increase economic stability in the U.S.
“There are better ways to do that, to get to those more rule-like policies,” Taylor said today in a Bloomberg radio interview on “The Hays Advantage” with Kathleen Hays and Vonnie Quinn. Pegging the dollar to “a broad price index” would be preferable because it would be “more robust.”
Taylor, who is among a group of 576 economists who endorsed Romney, created a rule for guiding monetary policy and served as a Treasury undersecretary in Republican President George W. Bush’s administration.
Republican drafters of their party’s 2012 platform included a plank this week to create a commission to “consider the feasibility” of returning the dollar to the gold standard. They proposed “to set a fixed value” for the currency after two days of deliberations in Tampa before the Republican National Convention begins there on Aug. 27.
Asked if he would accept a nomination as Federal Reserve Chairman by Romney, who said yesterday that he wouldn’t appoint Ben S. Bernanke to a third term, Taylor said that the question was “completely hypothetical” and that he is enjoying his research and advising the former Massachusetts governor.
“I’m enjoying tremendously what I’m doing right now,” Taylor said in the Bloomberg interview. “I’m having such a good time in civil society, as they say, in doing my research and commenting on what’s going on.”
Romney, asked yesterday in an interview on Fox Business Network who should replace Bernanke, said two of his top economic advisers, Glenn Hubbard of Columbia University and Greg Mankiw of Harvard University, are “excellent” aides. Romney said he hasn’t considered a “single person” to replace the Fed chief, whose second term ends in January 2014.
Taylor, Hubbard, Mankiw and Kevin Hassett, a director of economic policy studies at the American Enterprise Institute in Washington, backed Romney’s economic program in a paper this year that said President Barack Obama’s policies are causing the “economy’s awful performance.”
Romney’s plan to cut federal spending, reduce regulation, overhaul the tax code and reinforce entitlement programs “will completely change the direction of economic policy,” they wrote.
Fed officials should refrain from a third round of large-scale bond purchases known as quantitative easing, Taylor said in today’s interview.
“That’s created way too much uncertainty, the speculation about whether they will occur or not,” Taylor said. The benefits from the first two rounds “have been as far as I can see and estimate quite minimal,” he said.
“They should try to get away from these things and go back to the kind of policy that I think worked very well in much of the ’80s and ’90s,” the Stanford professor said.