Macro Musings

Sebastian Mallaby is a senior fellow at the Council on Foreign Relations and a contributing columnist for the Washington Post. Today, he joins the show to discuss his new book, *The Man Who Knew: the Life and Times of Alan Greenspan,* a biography of the former Fed Chairman. Sebastian describes Greenspan’s humble origins, his rise to power, and his public career that spanned several decades. David and Sebastian discuss the degree to which Greenspan should be praised for the economic stability of the Great Moderation and blamed for the Great Recession. They also chat about Greenspan’s musical talents, his relationship with Ayn Rand, and his reputation as a “ladies man.” David’s blog: http://macromarketmusings.blogspot.com/ Sebastian’s bio: http://www.cfr.org/experts/financial-crises-regional-security-economics/sebastian-mallaby/b4452 Sebastian’s Washington Post archive: http://www.cfr.org/experts/financial-crises-regional-security-economics/sebastian-mallaby/b4452 David’s Twitter: @davidbeckworth Sebastian Mallaby: @scmallaby *The Man Who Knew: the Life and Times of Alan Greenspan* by Sebastian Mallaby http://www.cfr.org/international-finance/man-knew/p37530

Eswar Prasad is the Tolani Senior Professor of Trade Policy and Professor of Economics at Cornell University and a senior fellow at the Brookings Institution. He joins the show to discuss his new book, *Gaining Currency: The Rise of the Renminbi,* which examines the rise of China’s currency, the renminbi (RMB), and its role in global finance. Prasad argues that the RMB is on the road to becoming a reserve currency, but it will not challenge the US dollar’s dominance as a safe haven currency. David and Eswar also discuss China’s interesting history as the first country with paper money and a fiat currency. David’s blog: http://macromarketmusings.blogspot.com/ Eswar’s Cornell homepage: http://prasad.dyson.cornell.edu/ Eswar’s Brookings homepage: https://www.brookings.edu/experts/eswar-prasad/ David’s Twitter: @davidbeckworth Eswar’s Twitter: @EswarSPrasad Related links: *Gaining Currency: The Rise of the Renminbi* by Eswar S. Prasad https://global.oup.com/academic/product/gaining-currency-9780190631055?cc=us&lang=en&

Jesus Fernandez-Villaverde is a professor of economics and director of graduate studies of economics at the University of Pennsylvania. He joins the show to discuss both his extensive work in economic history as well as macroeconomic modeling. David and Jesus discuss the economic history of Germany in the 1920s and 1930s and the events that led to the rise of the Nazis as well as more recent events such as the struggles facing the Eurozone. They also discuss debates surrounding the usefulness of current-day macroeconomic models. David’s blog: http://macromarketmusings.blogspot.com/ Jesus’ webpage: http://economics.sas.upenn.edu/~jesusfv/ David’s Twitter: @davidbeckworth Related links: “The econometrics of DSGE models” by Jesus Fernandez-Villaverde http://economics.sas.upenn.edu/~jesusfv/econometricsDSGE.pdf “Computing DSGE Models with Recursive Preferences and Stochastic Volatility” by Dario Caldara, Jesus Fernandez-Villaverde, Juan Rubio-Ramirez, and Wen Yao https://www.federalreserve.gov/pubs/feds/2012/201204/201204pap.pdf “The Trouble with Macroeconomics” by Paul Romer https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf

Gauti Eggertsson is a professor of economics at Brown University. Previously, he worked at the research departments at the International Monetary Fund and the Federal Reserve Bank of New York. He joins the show to discuss his work on the history of liquidity traps and extremely low and even negative interest rates. He and David discuss examples from the Great Depression to Japan in the 1990s to today. Gauti also shares his thoughts on the Fed’s quantitative easing (QE) program and why it failed to return the economy back to normal. David’s blog: http://macromarketmusings.blogspot.com/ Gauti’s Brown University homepage: https://sites.google.com/site/gautieggertsson/home David’s Twitter: @davidbeckworth Related links: “The Zero Bound on Interest Rates and Optimal Monetary Policy” by Gauti Eggertsson and Michael Woodford https://www.brookings.edu/bpea-articles/the-zero-bound-on-interest-rates-and-optimal-monetary-policy/ “Great Expectations and the End of the Depression” by Gauti Eggertsson https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr234.pdf “The Fed’s Dirty Little Secret” by David Beckworth http://people.wku.edu/david.beckworth/fed_dirty.pdf “Japan’s Trap” by Paul Krugman https://www.princeton.edu/~pkrugman/japans_trap.pdf

Anat Admati is the George G.C. Parker Professor of Finance and Economics at Stanford University’s Graduate School of Business and co-author of the book, *The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It.* She joins the show to discuss her book, which argues that America’s banking system continues to be dangerously fragile even in the aftermath of the Dodd-Frank Act. Anat argues that banks take on too much leverage and that they should be required to hold more equity. David’s blog: http://macromarketmusings.blogspot.com/ Anat’s Stanford profile: https://www.gsb.stanford.edu/faculty-research/faculty/anat-r-admati David’s Twitter: @davidbeckworth Anat’s Twitter: @anatadmati Related: *The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It* by Anat Admati and Martin Hellwig http://bankersnewclothes.com/ Anat’s paper, “It Takes a Village to Maintain a Dangerous Financial System” http://bankersnewclothes.com/wp-content/uploads/2016/06/Takes-a-Village-May-2016.pdf

In this week’s special episode recorded in front of a live audience, David interviews the renowned monetary economist, Allan Meltzer. Meltzer, a professor of political economy at Carnegie Mellon University and one of the founders of the monetarist school of thought discusses his long career in academia and policy. David and Allan also discuss current central bank policy, both in the United States and abroad, and how monetary policy can become more rules-based. Finally, Allan also argues many of our current economic problems are real, not nominal, and he hopes a Trump Administration can address some of these woes. Note: this episode took place before the December 2016 interest rate hike by the Federal Reserve. David’s blog: http://macromarketmusings.blogspot.com/ Allan Meltzer’s bio: http://tepper.cmu.edu/our-faculty-and-research/about-our-faculty/faculty-profiles/am05/meltzer-allan David’s Twitter: @DavidBeckworth Related links: “A History of the Federal Reserve (Volumes I and II)” by Allan Meltzer (University of Chicago Press) http://www.press.uchicago.edu/ucp/books/book/chicago/H/bo3634061.html http://www.press.uchicago.edu/ucp/books/book/chicago/H/bo6887672.html “Keynes’s Monetary Theory: A Different Interpretation” by Allan Meltzer (Cambridge University Press) https://www.amazon.com/Keyness-Monetary-Theory-Different-Interpretation/dp/0521022754

Ylan Mui covers White House economic policy for the Washington Post. Previously, she covered the Federal Reserve. Today, she joins the show to discuss what it is like to attend Fed press conferences and write on the technical nuances of Fed policy. David and Ylan also discuss what a Trump Administration might mean for economic issues ranging from trade to infrastructure spending to monetary policy. David’s blog: http://macromarketmusings.blogspot.com/ Ylan’s archive: https://www.washingtonpost.com/people/ylan-q-mui/ David's Twitter: @davidbeckworth Ylan's Twitter: @ylanmui

In this week’s special episode, David discusses the economics of Christmas with Laura Birg, a post-doctoral researcher at the University of Goettingen, and Anna Goeddke, a professor of economics at the ESB Business School at Reutlingen University. Topics include the dead-weight loss of gift-giving, Christmas’ effects on seasonal GDP, increases in alcohol consumption, and the effect of secularization on Christmas celebrations. [Note: We will be taking a break next week for the holidays, but we will be back the following Monday, January 2, with the Washington Post’s Ylan Mui!] David’s blog: macromarketmusings.blogspot.com/ David’s Twitter: @davidbeckworth Anna’s VoxEU profile: http://voxeu.org/users/annagoeddeke0 Anna’s Twitter: @annagoeddeke Laura’s University of Goettingen profile: https://www.uni-goettingen.de/en/362254.html Related links: “Christmas Economics – A Sleigh Ride” by Laura Birg and Anna Goeddke (2014) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2526055 “The Seasonal Cycle and the Business Cycle” by Robert Barsky and Jeffrey Miron (1988) http://www.nber.org/papers/w2688 “The Business Cycle Effects of Christmas” by YI Wen (2001) https://www.discuto.io/sites/default/files/christmas2010.pdf We Wish you a Merry Christmas Kevin MacLeod (incompetech.com) Licensed under Creative Commons: By Attribution 3.0 License http://creativecommons.org/licenses/by/3.0/

In this week’s special episode, David compares and contrasts the economics of the Star Wars and Star Trek universes. He is joined by Zachary Feinstein, an Assistant Professor at Washington University in St. Louis, and Manu Saadia, author of *Trekonomics.* Topics include the economic fallout from the destruction of the Death Star, the absence of money in Star Trek, and whether a universe can really eliminate scarcity. David’s blog: http://macromarketmusings.blogspot.com/ David’s Twitter: @davidbeckworth Manu’s *Trekonomics* website: https://trekonomics.tumblr.com/ (you can order the book, *Trekonomics,* here as well) Manu’s Twitter: @trekonomics Zach’s faculty profile: https://sites.wustl.edu/fictionomics/ Zach’s Twitter: @FictionomicsWU Related links: “It’s a Trap: Emperor Palpatine’s Poison Pill” by Zachary Feinstein https://arxiv.org/pdf/1511.09054.pdf “The Case for the Empire” by Jonathan Last http://www.weeklystandard.com/the-case-for-the-empire/article/2540

Peter Conti-Brown is an Assistant Professor at The Wharton School of the University of Pennsylvania. He joins the show to discuss his new book, *The Power and Independence of the Federal Reserve,* which exams the evolution of the Federal Reserve and what central bank independence really means. Peter also shares his thoughts on what a Trump presidency might mean for monetary policy. David’s bio: http://macromarketmusings.blogspot.com/ Peter’s UPenn bio: https://lgst.wharton.upenn.edu/profile/30645/ David’s Twitter: @davidbeckworth Peter’s Twitter: @PeterContiBrown Related links: *The Power and Independence of the Federal Reserve* by Peter Conti-Brown https://www.amazon.com/Power-Independence-Federal-Reserve/dp/0691164002 *America’s Bank: The Epic Struggle to Create the Federal Reserve* by Roger Lowenstein https://www.amazon.com/Americas-Bank-Struggle-Federal-Reserve/dp/1594205493

JP Koning is an economic consultant and writer. He joins the show to discuss fascinating stories in monetary history in Libya, Zimbabwe, and Switzerland. He also shares his thoughts on Blockchain technology and Fedcoin, a hypothetical cryptocurrency stabilized by the Federal Reserve. David’s blog: http://macromarketmusings.blogspot.com/ JP’s blog “Moneyness”: http://jpkoning.blogspot.com/ David’s Twitter: @davidbeckworth JP’s Twitter: @JP_Koning Related links: “What Happens When a Central Bank Splits in Two?” by JP Koning http://jpkoning.blogspot.com/2016/06/what-happens-when-central-bank-is-split.html “A Modern Example of Gresham’s Law” by JP Koning http://jpkoning.blogspot.com/2016/11/a-modern-example-of-greshams-law.html “Fedcoin” by JP Koning http://jpkoning.blogspot.ca/2014/10/fedcoin.html

Mark Calabria is the director of Financial Regulation Studies at the Cato Institute. Before joining Cato in 2009, he worked as a member of the senior staff of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. He joins the show to discuss working on Capitol Hill amidst the 2008 financial crisis. Mark also discusses his recent Cato paper where he argues insights from behavioral economics suggest monetary policy should be more rules-based. David’s blog: macromarketmusings.blogspot.com/ Mark’s Cato Institute profile: https://www.cato.org/people/mark-calabria Mark’s Alt-M archive: http://www.alt-m.org/author/calabria/ David’s Twitter: @davidbeckworth Mark’s Twitter: @markcalabria Related links: “Yes, the Fed has a Diversity Problem” by Mark Calabria https://www.cato.org/blog/yes-federal-reserve-has-diversity-problem “Behavioral Economics and Fed Policymaking” by Mark Calabria https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2016/9/cj-v36n3-6.pdf

Roger Farmer is a Distinguished Professor of Economics at UCLA. He joins the show to discuss his new book, Prosperity for All: How to Prevent Financial Crises. He and David also discuss his criticism of the natural rate of unemployment hypothesis, an important proposition in mainstream macroeconomics. David’s blog: http://macromarketmusings.blogspot.com/ Roger’s personal website: http://www.rogerfarmer.com/ David’s Twitter: @davidbeckworth Roger’s Twitter: @farmerrf Related links: Roger’s UCLA profile http://www.econ.ucla.edu/faculty/regular/Farmer.html Prosperity for All: How to Prevent Financial Crises by Roger Farmer https://global.oup.com/academic/product/prosperity-for-all-9780190621438?cc=us&lang=en& “The Natural Rate Hypthesis: An Idea Past Its Sell-by Date” by Roger Farmer http://www.nber.org/papers/w19267

Mark Koyama is an Assistant Professor of Economics at George Mason University and a Senior Fellow at George Mason University’s Mercatus Center. He joins the show to discuss his research on the economic history of ancient Rome from the rise of the Roman Republic to the transition to the Roman Empire to the Empire’s eventual fall. David’s blog: http://macromarketmusings.blogspot.com/ Mark’s Medium page: https://medium.com/@MarkKoyama Mark’s GMU profile: http://economics.gmu.edu/people/mkoyama2 David’s Twitter: @DavidBeckworth Mark’s Twitter: @MarkKoyama Related links: “The Roman Market Economy” by Peter Temin (2012, Princeton University Press) http://press.princeton.edu/titles/9896.html “Peter Temin and the Malthusian Hypothesis for the Limits of Roman Growth” by Mark Koyama https://medium.com/@MarkKoyama/peter-temin-and-the-malthusian-hypothesis-for-the-limits-of-roman-growth-12489edce93a#.ijytapey2 “Why did the Roman Economy Decline?” by Mark Koyama https://medium.com/art-marketing/why-did-the-roman-economy-decline-225deada66ea#.xnwksin86

Rüdiger (Rudi) Bachmann is a Stepan Family Associate Professor of Economics at the University of Notre Dame. He joins the show to discuss the economic history of his native Germany. David and Rudi also discuss how the German approach to macroeconomics is distinctly different from the approach taken in the United States. David’s blog: macromarketmusings.blogspot.com/ Rudi’s Notre Dame webpage: https://www3.nd.edu/~rbachman/ David’s Twitter: @DavidBeckworth Related links: Rudi on his work on economic uncertainty: https://www.youtube.com/watch?v=6XDlzBgf1uE NYT Upshot Article: “How Economists Came to Dominate the Conversation” http://www.nytimes.com/2015/01/24/upshot/how-economists-came-to-dominate-the-conversation.html?_r=0 Peter Bofinger’s Vox EU article: “German Macroeconomics: The Long Shadow of Walter Eucken” http://voxeu.org/article/german-macroeconomics-long-shadow-walter-eucken