Economist John Taylor has negotiated with Afghan warlords, followed the trail of terrorist financing and worked with Iraqis to create a post-Saddam federal reserve system, but the Stanford economics professor is best known to students as the author of their introductory economics textbook.

The former under secretary of the treasury for international affairs called for increased attention to economic issues in foreign policy in his keynote address to a Stanford Institute for Economic Policy Research (SIEPR) forum on “The Economics of War, Peace and Security” last Friday afternoon.

“We need to think more about the financial economic issues in our foreign policy,” Taylor told about 70 students, faculty and community members at the Bechtel Conference Center event. “Not a lot of people know about it, so I’m glad you’re here.”

He highlighted the importance of economics in international issues ranging from reconstructing Iraq and Afghanistan to defeating terrorism and preventing North Korea and Iran from realizing their nuclear ambitions, subjects which he also discussed in his recent book, “Global Financial Warriors: The Untold Story of International Finance in the Post 9/11 World.”

“Economics is a lot quicker than politics,” he said.

In Iraq, Taylor acknowledged the importance of ensuring that money was not misspent by corrupt officials, but he insisted that fears of corruption had to be subordinated to spending policies that encouraged economic growth.

“There’s this tension between getting the money dispersed quickly and worrying about the corruption which is very real,” he said. “I’d say spend some money, try to create some jobs and worry about the details later.”

Taylor reiterated the idea that lack of economic opportunity breeds resentment and terrorism, and he said that the export of an open economic system should take its place alongside the longstanding American doctrine of encouraging democracy.

“I think of this as complementing or augmenting the strategy of spreading democracy,” he said. “We need to stress that we’re not just spreading political freedom, but economic freedom as well.”

In addition to the role of economics in rebuilding countries, Taylor stressed the importance of international financial cooperation in tracking and defeating terror networks.

Immediately after 9/11, “the White House instructed the Treasury to put together a coalition to freeze the assets of Al Qaeda financiers around the world,” he said. “Of course this requires a lot of cooperation because the United States can’t do it alone. You can’t freeze the assets if they can just migrate to another country.”

Because Al Qaeda assets were frozen on Sept. 21, 2001, before troops were sent into Afghanistan, Taylor called the international action “the first shot in the War on Terror.”

Financial monitoring continues to play a role in combating terrorism, Taylor said, because U.S. and other security agencies use protocols of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to track funds transfers to terrorist groups.

Convincing banks worldwide to participate was an international effort, Taylor said, and he emphasized the care taken to avoid abuse of the information gathered.

“Any information had to be subpoenaed and the subpoena had to be audited,” he said. “The idea was to have this very formal protocol.”

Taylor expressed disappointment at The New York Times for outing the program last summer.

“Unfortunately, last summer it got leaked,” he said, “so it’s no longer as effective as it was.”

Taylor’s talk capped a day of discussions on a broad range of topics in international political economy, including talks with foreign policy heavy hitters like international relations Prof. Stephen Krasner, former director of policy planning at the State Department and Stuart Levey, under secretary of the treasury for terrorism and financial intelligence.

At the reception following the daylong conference, Taylor signed the fifth and most recent edition of his textbook, “Economics.”

“The Economics of War, Peace and Security” was the fourth biannual SIEPR conference.