2007: The Adam Smith Address the Explanatory Power of Monetary Policy Rules

Abstract

It is an honor to be here today to receive the Adam Smith Award, and it is a pleasure to give the Adam Smith Lecture. Everything I have read about Adam Smith tells me that he was passionate about his research and that his passion spilled over into his lectures. Many years ago,Woodrow Wilson wrote about Smith’s lecture style in his essay, The Old Master. As then Professor Wilson put it, “[Smith] constantly refreshed and rewarded his hearers … by bringing them to those clear streams of practical wisdom and happy illustration which everywhere irrigate his expositions.” You may have heard that Adam Smith would visit my introductory economics lectures at Stanford from time to time, interrupting me and speaking enthusiastically from the heavens. Well, it wasn’t really Adam Smith. It was my own recording of his voice piped through the lecture hall PA system. “Professor Taylor, Professor Taylor” the voice would say in an exasperated tone. “You told your students about economies of scale, and you didn’t even mention my famous story of the pin factory. Well let me tell them about it.” And then the students would listen to him reading out loud his famous, clear, practical story from the Wealth of Nations.