What caused the Crisis-Taylor

Good reading by John Taylor during this non action US Trading session.

How should the introductory economics text change in response the financial crisis, the recession and the very slow recovery?

The answer to the question depends a lot on what you think caused the crisis. If you think that it shows our economic theory—especially our macroeconomic theory—was wrong, and thereby gave the wrong policy prescriptions, then you have to think about massive changes. If you think the crisis shows that our economics was basically correct and that policy deviated from the recommendation of the theory, then you want to revise the text differently, and show with example after example how this happened. It is a unique teaching moment.

Full John Taylor presentation.