As stock markets around the world tumbled last month, the Fed cut its interest rate by 125 basis points, from 4 ¼ to just 3 percent, in a space of just eight days. Did Fed Chairman Ben Bernanke do the right thing? Or did he get spooked? That’s the very question I ask in this segment of the Uncommon Knowledge interview with economists Kenneth Judd and John Taylor.

Two notes about John Taylor, by the way: The first: He’s advising John McCain. The second: He’s the author of the Taylor Rule, a theorem that stipulates just what the Fed ought to about interest rates in any situation. About the Taylor Rule, you have a choice. You may either attempt to grasp it in full, a course I recommend for John Derbyshire, or you may watch this interview, during which John Taylor explains his rule so simply that even I was able to understand it, the course I recommend for the rest of us.