Macro Musings

Macro Musings

United States

Hosted by David Beckworth of the Mercatus Center, Macro Musings is a new podcast which pulls back the curtain on the important macroeconomic issues of the past, present, and future.


29 - Narayana Kocherlakota on the FOMC, the 2008 Crisis, and Monetary Rules  

Narayana Kocherlakota is the Lionel W. McKenzie Professor of Economics at the University of Rochester, and he previously served as president and CEO of the Federal Reserve Bank of Minneapolis. He joins the show to discuss to discuss what it is like working as a Fed president and a member of the Federal Open Market Committee. He also shares some of his thoughts on the drawbacks of current proposals on establishing monetary rules. David’s blog: Narayana’s website: David’s Twitter: @davidbeckworth Narayana’s Twitter: @kocherlakota009 Related links: Narayana’s profile, speeches, and articles as Fed president: Narayana’s Bloomberg archive: Narayana’s Brookings article: Rules vs. Discretion: A Reconsideration Responses to the Brookings article by John Taylor and George Selgin:

28 - Izabella Kaminska on Blockchain Technology and the Economics of Star Trek  

Izabella Kaminska is a writer for the Financial Times at its premier blog, FT Alphaville. She joins the show to discuss her work on blockchain technology as well as current proposals on monetary and fiscal policy. Finally, Izabella and David, who are both big sci-fi fans, talk about economics in the Star Trek and Star Wars sagas. David’s Twitter: @DavidBeckworth Izabella Kaminska’s Twitter: @izakaminska David’s blog: Izabella Kaminska’s FT bio and archive: Related links: “You see, money doesn’t exist in the 24th century” – Izabella Kaminska Even lower rates? “Thanks but no thanks” say banks everywhere – Izabella Kaminska Trekonomics: The Economics of Star Trek – Manu Saadia It’s a Trap: Emperor Palpatine’s Poison Pill – Zachary Feinstein

27 - Claudio Borio on Financial Stability, the Triffen Dilemma, and International Monetary Policy  

Claudio Borio is the director of the monetary and economic department at the Bank for International Settlements (BIS). He joins the show to discuss his career in monetary policy, banking, and macroprudential regulation. In particular, he and David discuss problems afflicting the Eurozone and how to address massive financial imbalances across the world. David’s Twitter: @DavidBeckworth Claudio’s bio and research: David’s blog: Related links: “Revisiting Three Intellectual Pillars of Monetary Policy” by Claudio Borio

26 – Andy Levin on Federal Reserve Reform  

Andrew Levin is a professor of economics at Dartmouth College and a former Federal Reserve Board economist. For two years, he worked as a special adviser to Chairman Ben Bernanke and Vice Chair Janet Yellen. He joins the podcast to discuss his experiences at the Fed  and the need for more accountability. His ideas include increasing transparency, setting term limits, and fostering diversity of thought and background among its members.    David’s Twitter: @DavidBeckworth Andy Levin’s Twitter: @AndrewTLevin David’s blog: Andy Levin’s bio:   Related links: Dartmouth College Q&A with Professor Andy Levin     How Andy proposes to reform the Fed:

25 - Morgan Ricks on *The Money Problem,* Financial Regulation, and Shadow Banking  

Morgan Ricks is a law professor at Vanderbilt University and an expert on financial regulation. From 2009-2010, he was a senior policy adviser at the U.S. Treasury Department where he focused on financial stability initiatives. Morgan joins the show to discuss his new book, “The Money Problem: Rethinking Financial Regulation,” which argues that shadow banking institutions create large sums of private sector money through issuing short-term debt. This rapid expansion creates instability to the financial system and to the broader economy. To solve this problem, Morgan proposes that only properly chartered, FDIC-insured banks be allowed to issue short-term liabilities. Although there may be more bureaucracy in insuring the financial system under this proposal, Morgan argues there would be less need for higher capital requirements and other regulations. David’s blog: Morgan Ricks’ Vanderbilt profile: David’s Twitter: @DavidBeckworth Morgan Ricks’ Twitter: @MorganRicks1 Related links: The Money Problem: Rethinking Financial Regulation David’s review of The Money Problem in National Review (gated) “A Simpler Approach to Financial Reform” by Morgan Ricks “A Former Treasury Adviser on How to Really Fix Wall Street” by Morgan Ricks in The New Republic

24 - Ryan Avent on *The Wealth of Humans,* Job Automation, and Globalization  

Ryan Avent is an economics columnist for The Economist and author of the new book, The Wealth of Humans: Work, Power, and Status in the Twenty-First Century. He joins the show to discuss his new book, which explores how the Digital Revolution is dramatically changing the economy and our lives. He also discusses how he previously worked at the Bureau of Labor Statistics and as a private sector consultant before moving to journalism. Finally, David and Ryan talk about economic angst both in the United States and abroad as well as some sound macroeconomic policies to address this. David’s Twitter: @davidbeckworth David’s blog: Ryan Avent’s Twitter: @ryanavent Ryan Avent’s website: Related links:

23 - Michael Bordo on Anna Schwartz, Financial Crises, and Life as a Monetary Historian  

Michael D. Bordo is a professor of economics and the director of the Center for Monetary and Financial History at Rutgers University, a Distinguished Visiting Fellow at the Hoover Institution, and a research associate at the National Bureau of Economic Research. He has also been a visiting scholar at numerous central banks across the world. Michael, a prolific scholar, joins the show to discuss a long career in monetary economics, including his research with the legendary Anna Schwartz. He shares his thoughts on the Great Recession and how it compares with the Great Depression. Additionally, he challenges the notion that financial crises like the 2007-2009 crisis are necessarily followed by slow recoveries. David and Michael also chat about the history of American banking law and how restrictions on interstate-branch banking until the 1990s hindered economic growth. Finally, Michael gives some advice about how to be a successful monetary historian! David’s blog: Michael Bordo’s homepage: David’s Twitter: @davidbeckworth Related links: Michael Bordo in The Wall Street Journal: “Financial Recessions Don’t Lead to Weak Recessions” “A Lesson from the Great Depression that the Fed Might have Learned: A Comparison of the 1932 Open Market Purchases with Quantitative Easing” “A Fiscal Union for the Euro: Some Lessons from History” “Under What Circumstances can Inflation be a Solution to Excessive National Debt: Some Lessons from History”

22 - Peter Ireland on the Chicago School, Federal Reserve Policy Targets, and Monetary Aggregates  

Peter Ireland is the Murray and Monti Professor of Economics at Boston College, a research associate at the National Bureau of Economic Research, and a member of the Shadow Open Market Committee. He joins the show to discuss his experience as a student at the University of Chicago as well as the nuts and bolts of how the Federal Reserve sets out to achieve its short-, medium-, and long-term objectives. David and Peter also discuss the role of monetary aggregates in monetary policy. Economists largely don’t pay much attention to the traditional simple-sum measures of the money supply anymore, but Ireland argues that more complex measures of money, called Divisia indices, can teach us a lot about the stance of monetary policy. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.]…aign=MonetaryRules David’s blog: Peter Ireland’s personal website: Peter Ireland’s Boston college profile: David’s Twitter: @davidbeckworth Peter Ireland’s Twitter: @PIrelandatBC Related links: The Shadow Open Market Committee A “Working” Solution to the Question of Nominal GDP Targeting by Peter Ireland and Michael Belongia

21 – Hugh Rockoff on Optimal Currency Areas, “Yellowbacks,” and Free Banking  

Hugh Rockoff is a professor of economics at Rutgers University and has done extensive work in U.S. monetary history. He joins the show to discuss the criteria for an ideal monetary union and argues that the U.S. didn’t really become an optimal currency area until the 1930s. David and Hugh then discuss whether a present-day example, the Eurozone, fits these criteria. They also talk about interesting chapters in U.S. monetary history, including the Civil War, the Free Banking Era, and the bimetallism debate of the late 1800s. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.] David’s blog: Hugh Rockoff’s homepage: David’s Twitter: @davidbeckworth Related links History of the American Economy by Hugh Rockoff and Gary M. Walton “How Long Did It Take the United States to Become an Optimal Currency Area?” (National Bureau of Economic Research) “The Wizard of Oz as a Monetary Allegory” (The Journal of Political Economy) The Free Banking Era: A Re-Examination (Dissertations in American Economic History)

20 - Douglas Irwin on Free Trade, the Gold Standard, and American Economic History  

Douglas Irwin, professor of economics at Dartmouth College and author of Free Trade Under Fire (Princeton University Press, 2015), joins the show to discuss the economic arguments for free trade and the reasons for the heated politics surrounding trade. He describes the history of U.S. trade policy from the Embargo Act of 1808 to the Smoot-Hawley Tariff of 1930 to the North American Free Trade Agreement (NAFTA). Finally, he and David discuss the role of the inter-war gold standard during the Great Depression. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.] David’s blog: Douglas Irwin’s homepage: David’s Twitter: @davidbeckworth Douglas Irwin’s Twitter: @D_A_Irwin Related links: “The Truth About Trade: What Critics Get Wrong About the Global Economy” (Foreign Affairs) Free Trade Under Fire (Princeton University Press, fourth edition 2015) “The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo,” 1807-09. Review of International Economics. “Did France Cause the Great Depression?” (NBER Working Paper)

19 - Nick Rowe on Monetary Basics, Milton Friedman’s Thermostat, and More  

Nick Rowe is a professor of economics at Carleton University in Ottawa, a member of the CD Howe Institute’s Monetary Policy Council and of Carlton University’s Centre for Monetary and Financial Economics, and a popular blogger at "Worthwhile Canadian Initiative." He developed an interest in macroeconomics as he came of age in the United Kingdom during the high inflation period from the late 1960s to 1970s. Nick joins the show to discuss some of the basics of monetary economics and argues that money is the critical factor that distinguishes macroeconomics from microeconomics. He also shares his thoughts on helicopter money, which he thinks is “small beer” or not as big a deal as commentators make it out to be. Finally, David and Nick also discuss some helpful analogies Nick has used to illustrate economic concepts including “Milton Friedman’s thermostat” – how a good thermostat works like a good central bank! David’s blog: Nick Rowe’s blog: David’s Twitter: @DavdBeckworth Nick Rowe’s Twitter: @MacRoweNick Related links Centre for Monetary and Financial Economics (homepage) “What Makes a Central Bank? Asymmetric Redeemability and the Will to Act as One.” “Helicopter Money is Small Beer, and Normal” “Is Money a Liability?” “Milton Friedman’s Thermostat”

18 - Jason Taylor on the Great Depression, World War II, and “The Big Push”  

Jason Taylor, professor of economics at Central Michigan University and editor-in-chief of "Essays in Economic & Business History," is an expert in U.S. economic history, particularly during the Great Depression and World War II. He joins the show to discuss the causes of the Great Depression and the policy responses to the Depression under Herbert Hoover and Franklin D. Roosevelt. David and Jason look at policies ranging from the international gold standard to the National Industrial Recovery Act. They also explore the possibility that large public spending during the New Deal and World War II may have facilitated a “Big Push” that helped modernize the American South. Finally, Jason and David also examine parallels between the Great Depression and the Great Recession. David’s blog: David’s Twitter: @davidbeckworth Jason’s webpage:

17 - Brad DeLong on Hamiltonian Political Economy and American Economic History  

J. Bradford DeLong – professor of economics at UC-Berkeley, research associate at the National Bureau of Economic Research, and a deputy assistant secretary of the U.S. Treasury during Bill Clinton’s presidency – joins the show to discuss his new book, “Concrete Economics: The Hamilton Approach to Economic Growth and Policy.” Brad’s book, co-authored with Stephen Cohen, argues that rather than relying on abstract theory, Hamilton economics is based on facts that demonstrate how the American economy has benefited from pragmatic government policies throughout its history. David and Brad also discusses Brad’s education at Harvard and how he is a “speed reader”! David’s blog: Brad DeLong’s blog: Brad DeLong’s UC Berkeley profile David’s Twitter: @DavidBeckworth Brad DeLong’s Twitter: @DeLong Related links "Concrete Economics: The Hamilton Approach to Economic Growth and Policy (2016)" by Stephen S. Cohen and J. Bradford DeLong "The End of Influence: What Happens When Other Countries Have the Money" by Stephen S. Cohen and J. Bradford DeLong (2010) Brad DeLong’s Journal of Economics article, “The Triumph of Monetarism?” (2000)

16 - David Andolfatto on on Life at the Fed, Equity-Based Finance, and the Blockchain  

David Andolfatto is a vice president of the St. Louis Federal Reserve Bank and a professor of economics at Simon Fraser University. He joins the show to discuss life at the St. Louis Fed, equity-based finance as a means of averting financial crises, and challenges in using monetary policy to drive nominal growth. Finally, David also clarifies some of the misconceptions surrounding Blockchain technology and explains what this technology may mean for Federal Reserve policy. David Beckworth’s Twitter: @davidbeckworth David Beckworth’s Blog: David Andolfatto’s Twitter: @dandolfa David Andolfatto’s Blog: Related links The Diamond-Dybvig Model on bank runs: David Andolfatto on “A Dirty Little Secret” about monetary policy:

15 - Robert Hall on GDP Measurement and the Long Slump  

Robert Hall, professor of economics at Stanford University and senior fellow at the Hoover Institution, has written on macroeconomic issues since the 1960s. Bob is also the chairman of the National Bureau of Economic Research’s Committee on Business Cycle Dating, which maintains the chronology of U.S. business cycles. He joins the show to discuss the difficulties of measuring gross domestic product and dating the beginning and end of recessions. David and Bob also talk about the pros and cons of nominal GDP targeting and price level targeting. Finally, Bob shares his thoughts on why our economy has performed so lethargically since the Great Recession. David’s Twitter: @davidbeckworth David’s blog: Keywords: interview, macroeconomics, Federal Reserve, Great Stagnation, GDP Related links: Robert Hall’s bio: Robert Hall's list of publications: Robert Hall and Gregory Mankiw on nominal GDP targeting: (Photo Credit: Peter Tenzer)

14 - Mark Thoma on Fiscal Policy, Econometrics, and Political Business Cycles  

In this week’s episode, David speaks with Mark Thoma, professor of economics at the University of Oregon and author of the popular blog, “Economist’s View.” Mark discusses his journey into econometrics and the application of econometric techniques to macroeconomic and monetary issues. Looking back at the 2008 crisis, Mark makes the case that fiscal stimulus should have been much stronger. He and David also discuss the role of monetary policy and financial regulation during this time. Finally, Thoma also explains some of his work on political business cycles: instances where politicians affect policy to increase the likelihood of being reelected. David’s blog: Mark Thoma’s blog: David’s Twitter: @DavidBeckworth Mark Thoma’s Twitter: @MarkThoma Related links Mark Thoma’s Webpage: Mark Thoma’s CBS archive: Mark Thoma’s Fiscal Times archive: David’s first blog post:

13 - Joseph Gagnon on Quantitative Easing in the United States and Abroad  

As a Federal Reserve official, Joseph Gagnon played a critical role in providing the intellectual justification for the Fed’s quantitative easing (QE) programs. Now a senior fellow at the Peterson Institute for International Economics, Joe joins the show to discuss the events leading up to the decision to implement QE and its consequences. He and David also discuss how the Fed’s QE compares and contrasts with the QE implemented by the Bank of Japan and the European Central Bank. Finally, Joe shares some of his thoughts on Brexit’s wider implications. David’s blog: Joseph Gagnon’s biography: David’s Twitter: @DavidBeckworth Joseph Gagnon’s Twitter: @GagnonMacro Note: this recording was taped before the Brexit vote on June 23. Related Links “Large-Scale Asset Purchases by the Federal Reserve: Did They Work?” “Quantitative Easing: An Underappreciated Success”

12 - Will Luther on Bitcoin, Vodka, and the Emergence of Money  

What is money and where does it come from? Will Luther, assistant professor of economics at Kenyon College, joins the show and explains the two competing theories on the origins of money. The first theory posits governments are needed to provide credibility for money as a medium of exchange. The second theory, the spontaneous order theory, argues market actors will arrive at an acceptable medium of exchange on their own. David and Will discuss historic examples of both public and private money, including the Somali shilling and the brief use of vodka as a form of currency in Russia in the 1990s. Will also explains how Bitcoin and other forms of cryptocurrency work and how cryptocurrency may affect future macroeconomic policy. David’s blog: Will Luther’s webpage: David’s Twitter: @DavidBeckworth Will Luther’s Twitter: @WilliamJLuther Related links: “Synthesizing State and Spontaneous Order Theories of Money” “The Monetary Mechanism of Stateless Somalia” “Regulating Bitcoin: On What Grounds?” “On the Origins of Money”

11 - Robert Hetzel on Milton Friedman, the Monetarist-Keynesian Debate, and the 2008 Crisis  

Robert Hetzel is a senior economist and research advisor at the Richmond Federal Reserve Bank where he has worked since 1975. He joins the show to discuss the rise of monetarism and how Milton Friedman, his dissertation advisor, shaped his thinking on macroeconomics. Monetarism challenged the conventional Keynesian consensus in the 1970s and caused Keynesians to reformulate their views into a new doctrine called, “New Keynesianism.” However, in the wake of the Great Recession, “Old Keynesianism” has made a comeback. Hetzel pushes back against the Keynesian resurgence and explores other explanations of the 2008 crisis. David's blog: David's Twitter: Robert Hetzel's biography: Related links:

10 - Lars Christensen on the Eurozone Crisis and International Monetary Policy  

Lars Christensen, an internationally renowned Danish economist and Senior Fellow at London’s Adam Smith Institute, discusses the poor monetary policy that has plagued the Eurozone. Christensen, the coiner of the term “market monetarism,” argues that Europe from the beginning was not an optimal region for its members to share a single currency and that the European Central Bank’s decisions have greatly worsened the Eurozone’s economic pain. This suffering, consequently, has led to the rise of extremist movements throughout the region. Lars and David also turn their conversation to the lesser-known “dollar bloc,” the group of countries that either use the U.S. dollar or peg their currencies to the dollar. David's blog: Lars Christensen’s blog: David’s Twitter: Lars Christensen’s Twitter:

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