Leading economists have differing views on recovery

Leading economists agreed at the recent American Economic Association meeting that economic output has fallen short of its potential. Additionally, the 2009 fiscal stimulus was not aggressive enough to spur the recovery, however policy will lead to faster growth.

What economists didn't agree on was how to improve the economy. Stanford economist John Taylor argued that government needs to go back to the "rules-based" fiscal policies which historically have shown careful growth - NOT the unusual policy steps of quantitative easing (the bond buying stimulus program, and the bailout of financial institutions), which he believes are not sound for recovery.

On the other hand, Harvard's Larry Summers worked in the turbulent Obama years of QE and the bailout; his solution was to go beyond the historic norms of fiscal policy and treat the economy as a patient, gauging and monitoring the condition to respond appropriately.

Who holds the keys to 2014's economy? All eyes are on nearly-appointed Federal Reserve Chairman Janet Yellen, who is a believer and practitioner of a rules-based monetary policy. Overall, 2014 looks to be one of the strongest years in the recent past with consumer spending up as housing and stock markets have risen.