Nobel Prize in Economics Underscores the Case for an Open Fed

The Royal Swedish Academy of Sciences has a fantastic sense of humor. At a time when Federal Reserve Chair Kevin Warsh has turned central bank “forward guidance” into a banned phrase, the academy awarded the Nobel Prize in economics to Michael Woodford, one of the intellectual fathers of the practice, and Robert Hall, whose research on household expectations provided a foundation for Woodford’s later research. Hopefully, the award will lead Warsh to reconsider his crusade against guidance and tr