Macro Musings

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: macromarketmusings.blogspot.com/ Narayana’s website: https://sites.google.com/site/kocherlakota009/ David’s Twitter: @davidbeckworth Narayana’s Twitter: @kocherlakota009 Related links: Narayana’s profile, speeches, and articles as Fed president: https://www.minneapolisfed.org/about/more-about-the-fed/presidents-of-the-minneapolis-fed/narayana-kocherlakota Narayana’s Bloomberg archive: https://www.bloomberg.com/view/contributors/APvwpZqjDaA/narayana-kocherlakota/articles Narayana’s Brookings article: Rules vs. Discretion: A Reconsideration https://www.brookings.edu/bpea-articles/rules-versus-discretion-a-reconsideration/ Responses to the Brookings article by John Taylor and George Selgin: https://economicsone.com/2016/09/17/kocherlakota-on-the-fed-and-the-taylor-rule/ http://www.alt-m.org/2016/09/22/rules-discretion-audacity-critique-kocherlakota/

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: http://macromarketmusings.blogspot.com/ Izabella Kaminska’s FT bio and archive: http://ftalphaville.ft.com/meet-the-team/izabella-kaminska/ Related links: “You see, money doesn’t exist in the 24th century” – Izabella Kaminska http://ftalphaville.ft.com/2015/10/12/2142030/you-see-money-doesnt-exist-in-the-24th-century/ Even lower rates? “Thanks but no thanks” say banks everywhere – Izabella Kaminska http://ftalphaville.ft.com/2016/07/11/2168870/even-lower-rates-thanks-but-no-thanks-say-banks-everywhere/ Trekonomics: The Economics of Star Trek – Manu Saadia https://www.amazon.com/Trekonomics-Economics-Star-Manu-Saadia/dp/1941758754 It’s a Trap: Emperor Palpatine’s Poison Pill – Zachary Feinstein https://arxiv.org/pdf/1511.09054.pdf

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: https://www.bis.org/author/claudio_borio.htm David’s blog: macromarketmusings.blogspot.com/ Related links: “Revisiting Three Intellectual Pillars of Monetary Policy” by Claudio Borio http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2016/5/cj-v36n2-1.pdf

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: http://macromarketmusings.blogspot.com/ Andy Levin’s bio: http://www.dartmouth.edu/~alevin/   Related links: Dartmouth College Q&A with Professor Andy Levin http://www.thedartmouth.com/article/2016/09/qa-with-economics-professor-andrew-levin     How Andy proposes to reform the Fed: http://www.businessinsider.com/andrew-levins-4-radical-fed-changes-2016-4 http://www.bloomberg.com/politics/articles/2016-04-11/former-yellen-adviser-proposes-sweeping-reform-of-fed-system http://www.wsj.com/articles/former-fed-adviser-activists-lay-out-a-plan-for-change-at-the-fed-1460400788 https://www.federalreserve.gov/monetarypolicy/fomchistorical2008.htm

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: http://macromarketmusings.blogspot.com/ Morgan Ricks’ Vanderbilt profile: http://law.vanderbilt.edu/bio/morgan-ricks David’s Twitter: @DavidBeckworth Morgan Ricks’ Twitter: @MorganRicks1 Related links: The Money Problem: Rethinking Financial Regulation https://www.amazon.com/Money-Problem-Rethinking-Financial-Regulation/dp/022633032X David’s review of The Money Problem in National Review (gated) https://www.nationalreview.com/magazine/2016-09-12-0100/morgan-ricks-the-money-problem “A Simpler Approach to Financial Reform” by Morgan Ricks http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2316900 “A Former Treasury Adviser on How to Really Fix Wall Street” by Morgan Ricks in The New Republic https://newrepublic.com/article/98659/wall-street-term-out-panic

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: http://macromarketmusings.blogspot.com/ Ryan Avent’s Twitter: @ryanavent Ryan Avent’s website: http://www.ryanavent.com/blog/?page_id=6 Related links: http://www.economist.com/ https://www.amazon.com/Wealth-Humans-Status-Twenty-first-Century/dp/1250075807

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: macromarketmusings.blogspot.com Michael Bordo’s homepage: https://sites.google.com/site/michaelbordo/ David’s Twitter: @davidbeckworth Related links: Michael Bordo in The Wall Street Journal: “Financial Recessions Don’t Lead to Weak Recessions” http://www.wsj.com/articles/SB10000872396390444506004577613122591922992 “A Lesson from the Great Depression that the Fed Might have Learned: A Comparison of the 1932 Open Market Purchases with Quantitative Easing” http://www.frbsf.org/economic-research/files/S01_P1_Arunima-Sinha.pdf “A Fiscal Union for the Euro: Some Lessons from History” http://www.nber.org/papers/w17380 “Under What Circumstances can Inflation be a Solution to Excessive National Debt: Some Lessons from History” http://docplayer.net/6583440-Under-what-circumstances-can-inflation-be-a-solution-to-excessive-national-debt-some-lessons-from-history.html

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.] http://mercatus.org/content/register-monetary-rules-post-crisis-world David’s blog: macromarketmusings.blogspot.com/ Peter Ireland’s personal website: https://www2.bc.edu/peter-ireland/ Peter Ireland’s Boston college profile: http://www.bc.edu/schools/cas/economics/faculty-and-staff/faculty-listing/peter-ireland.html David’s Twitter: @davidbeckworth Peter Ireland’s Twitter: @PIrelandatBC Related links: The Shadow Open Market Committee http://shadowfed.org/ A “Working” Solution to the Question of Nominal GDP Targeting by Peter Ireland and Michael Belongia https://dlib.bc.edu/islandora/object/bc-ir:103357/datastream/PDF/view

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.] http://mercatus.org/monetaryconference?utm_source=MacroMusingsPodcast&utm_medium=link&utm_campaign=MonetaryRules David’s blog: http://macromarketmusings.blogspot.com/ Hugh Rockoff’s homepage: http://econweb.rutgers.edu/rockoff/ David’s Twitter: @davidbeckworth Related links History of the American Economy by Hugh Rockoff and Gary M. Walton https://www.amazon.com/History-American-Economy-Economics-Titles/dp/1111822921 “How Long Did It Take the United States to Become an Optimal Currency Area?” (National Bureau of Economic Research) http://www.nber.org/papers/h0124 “The Wizard of Oz as a Monetary Allegory” (The Journal of Political Economy) https://www.unc.edu/~salemi/Econ006/Rockoff.pdf The Free Banking Era: A Re-Examination (Dissertations in American Economic History) https://www.amazon.com/Free-Banking-Era-Re-Examination-Dissertations/dp/0405072155

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.] http://mercatus.org/monetaryconference?utm_source=MacroMusingsPodcast&utm_medium=link&utm_campaign=MonetaryRules David’s blog: http://macromarketmusings.blogspot.com/ Douglas Irwin’s homepage: https://www.dartmouth.edu/~dirwin/ 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) https://www.foreignaffairs.com/articles/2016-06-13/truth-about-trade Free Trade Under Fire (Princeton University Press, fourth edition 2015) https://www.amazon.com/Free-Trade-under-Fire-Fourth/dp/0691166250 “The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo,” 1807-09. Review of International Economics. http://www.dartmouth.edu/~dirwin/docs/Embargo.pdf “Did France Cause the Great Depression?” (NBER Working Paper) http://www.nber.org/papers/w16350

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: http://macromarketmusings.blogspot.com/ Nick Rowe’s blog: http://worthwhile.typepad.com/ David’s Twitter: @DavdBeckworth Nick Rowe’s Twitter: @MacRoweNick Related links Centre for Monetary and Financial Economics (homepage) http://carleton.ca/economics/research/cmfe/ “What Makes a Central Bank? Asymmetric Redeemability and the Will to Act as One.” http://worthwhile.typepad.com/worthwhile_canadian_initi/2009/10/what-makes-a-bank-a-central-bank.html “Helicopter Money is Small Beer, and Normal” http://worthwhile.typepad.com/worthwhile_canadian_initi/2016/05/helicopter-money-is-small-beer.html “Is Money a Liability?” http://worthwhile.typepad.com/worthwhile_canadian_initi/2012/03/is-modern-central-bank-money-a-liability.html “Milton Friedman’s Thermostat” http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/12/milton-friedmans-thermostat.html

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 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: http://macromarketmusings.blogspot.com/ David’s Twitter: @davidbeckworth Jason’s webpage: https://sites.google.com/site/taylo2je/ Jason's article, "Did New Deal and World War II Public Capital Investments Facilitate a "Big Push" in the American South? https://www.jstor.org/stable/40752762?seq=1#page_scan_tab_contents

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 discuss Brad’s education at Harvard and how he is a “speed reader”! David’s blog: http://macromarketmusings.blogspot.com/ Brad DeLong’s blog: http://delong.typepad.com/ Brad DeLong’s UC Berkeley profile https://www.econ.berkeley.edu/faculty/812 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 https://www.amazon.com/Concrete-Economics-Hamilton-Approach-Economic/dp/1422189813 "The End of Influence: What Happens When Other Countries Have the Money" by Stephen S. Cohen and J. Bradford DeLong (2010) https://www.amazon.com/End-Influence-Happens-Other-Countries/dp/B004MKLS28 Brad DeLong’s Journal of Economics article, “The Triumph of Monetarism?” (2000) https://www.aeaweb.org/articles?id=10.1257/jep.14.1.83

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: http://macromarketmusings.blogspot.com/ David Andolfatto’s Twitter: @dandolfa David Andolfatto’s Blog: http://andolfatto.blogspot.com/ Related links The Diamond-Dybvig Model on bank runs: https://www.macroeconomics.tu-berlin.de/fileadmin/fg124/financial_crises/literature/Diamon_Dybvig_Bank_Runs__Deposit_Insurance__and_Liquidity.pdf David Andolfatto on “A Dirty Little Secret” about monetary policy: http://andolfatto.blogspot.com/2014/11/a-dirty-little-secret.html

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: http://macromarketmusings.blogspot.com/ Keywords: interview, macroeconomics, Federal Reserve, Great Stagnation, GDP Related links: Robert Hall’s bio: http://stanford.edu/~rehall/ Robert Hall's list of publications: http://www.stanford.edu/~rehall/All_publications.htm Robert Hall and Gregory Mankiw on nominal GDP targeting: http://www.stanford.edu/~rehall/Nominal%20Income%20Targeting%201994.pdf (Photo Credit: Peter Tenzer)