Stanford economist JOHN B. TAYLOR has won this year’s Hayek Prize for his book, First Principles: Five Keys to Restoring America’s Prosperity. The $50,000 award is given by the Manhattan Institute in New York and honors the book that best reflects economist and Nobel laureate Friedrich Hayek’s vision of economic and individual liberty.
In First Principles, Taylor offers solutions to the current economic crisis that involve returning to America’s founding principles. “The premise of (First Principles),” writes Taylor, “is that the best way to understand the problems confronting the American economy is to go back to the first principles of economic freedom upon which the country was founded.”
Taylor shows that when we embrace these first principles, the economy prospers. When we abandon them, the economy falters.
A senior fellow at the Hoover Institution, Taylor previously served as undersecretary of the Treasury for international affairs. He was also a member of President George H.W. Bush’s Council of Economic Advisers.
He is the creator of the Taylor Rule, a monetary policy rule that stipulates how much the central bank should change the nominal interest rate in response to changes in inflation, output or other economic conditions.
Taylor will accept the prize and deliver the Hayek Lecture on May 31 in New York City.