Macro Musings

Talmon Smith is an economics reporter for The New York Times and joins David on Macro Musings to talk about the great inflation surge of 2021 and its implications for policy and politics. Specifically, David and Talmon discuss the potential drivers and implications of the great inflation surge that has taken place in 2021, the current and future state of supply chains, the impact of COVID-era stimulus, the state of the labor market, the political implications of the inflation surge, and much more.   Want to support the show? Visit donate.mercatus.org/podcasts.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Talmon’s Twitter: @talmonsmith Talmon’s New York Times profile: https://www.nytimes.com/by/talmon-joseph-smith   Related Links:   *One-year jump in energy prices is a big factor in inflation’s jump*  by Talmon Smith https://www.nytimes.com/live/2021/12/10/business/inflation-cpi-stock-market-news#one-year-jump-in-energy-prices-is-a-big-factor-in-inflati

Yesha Yadav is a law professor and associate dean at the Vanderbilt University Law School, where she works on banking and financial regulation, securities regulation, and the law of money and payment system. Yesha has written a recent paper titled, *The Failed Regulation of US Treasury Markets*, and she joins Macro Musings to discuss it. Specifically, David and Yesha talk about the implications of the 2020 Treasury market collapse, the fragmented nature of the Treasury market’s regulatory structure, solutions for reform, and more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Yesha’s Vanderbilt Law profile: https://law.vanderbilt.edu/bio/yesha-yadav Yesha’s Google Scholar archive: https://scholar.google.com/citations?user=Dn5cmSQAAAAJ&hl=en   Related Links:   *The Failed Regulation of U.S. Treasury Markets* by Yesha Yadav https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3365829   *Fragile Financial Regulation* by Pradeep Yadav and Yesha Yadav https

Carola Binder is an Associate Professor of Economics at Haverford College, and Christina Parajon Skinner is an assistant professor at the Wharton School at the University of Pennsylvania. Both are returning guests to Macro Musings and they rejoin the podcast to talk about populism at the Fed and its implications for policy. Specifically, they discuss rising technopopulism at the Fed, the effect of populist pressures on its legitimacy, the importance of balancing experimentation and intellectual freedom with managing risks of politicization at the Fed, as well as their thoughts on the recent bouts of inflation.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Carola’s Twitter: @cconces Carola’s blog: https://carolabinder.blogspot.com/ Carola’s Haverford profile: https://carolabinder.sites.haverford.edu/   Christina’s Twitter: @CParaSkinner Christina’s Wharton profile: https://lgst.wharton.upenn.edu/profile/skinnerc/   Related Links:   Cato Institute 39th Annu

Matthew Klein is the author of The Overshoot, a newsletter that helps readers make sense of the global economy. Matt is also a returning guest to the podcast, and rejoins Macro Musings to talk about the hot topic of inflation and its outlook. Specifically, David and Matt discuss what is driving trend inflation, Matt’s decomposition of the CPI, whether or not we should be worried about inflationary trends, and more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Matthew’s Twitter: @M_C_Klein Matthew’s Substack: https://theovershoot.co/about   Related Links:   *The Case for Patience on Inflation* by Matthew Klein https://theovershoot.co/p/the-case-for-patience-on-inflation   *What’s Going On With Interest Rates? (Part 1)* by Matthew Klein https://theovershoot.co/p/whats-going-on-with-interest-rates   *Fed Policy Must Adjust for Inflation* by Martin Wolf https://www.ft.com/content/dc3bedc7-5694-4868-8b86-f9a215966f52   David’s Twitter: @DavidBeckworth David’s

Markus Brunnermeier is a professor of economics and the director of the Bendheim Center for Finance at Princeton University. Markus is also a nonresident senior fellow at the Peterson Institute for International Economics. Markus joins Macro Musings to discuss his new book, titled “The Resilient Society,” as well as his work on safe assets and their implications for inflation. Specifically, David and Markus discuss the implications of the fiscal theory of the price level for inflation, the role of the Fed in stabilizing money markets, what is meant by “resilience” compared to “robustness” in economies, and much more.   Transcript can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Markus’s Twitter: @MarkusEconomist Markus’s Princeton profile: https://scholar.princeton.edu/markus/home   Related Links:   *The Fiscal Theory of the Price Level with a Bubble* by Markus Brunnermeier https://scholar.princeton.edu/markus/publications/fiscal-theory-price-level-bubble   *The Resilient Society* by M

Ajmal Ahmady is the former acting governor of the Central Bank of Afghanistan and is now a senior fellow at the Harvard Kennedy School of Government. Ajmal joins Macro Musings to talk about his experience as a central bank governor in Afghanistan and the challenges now facing the nation’s economy. Specifically, David and Ajmal discuss his unique role as the country’s central bank chief, the structure of the Afghan monetary system, the state of the nation’s economy moving forward, and more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Ajmal’s Twitter: @aahmady Ajmal’s biography: https://en.wikipedia.org/wiki/Ajmal_Ahmady   Related Links:   Ajmal’s Twitter thread about Afghanistan’s collapse: https://twitter.com/aahmady/status/1427265049668636674?lang=en   *Why Afghanistan Fell: An Insider’s Account of What Went Wrong* by Ajmal Ahmady https://www.foreignaffairs.com/articles/afghanistan/2021-10-11/why-afghanistan-fell   *Severe Drought Adds to Afghanistan’

Peter Stella is the former Head of the IMF Central Banking division and has researched and written extensively on safe assets, collateral and central bank operations. Peter now hosts a website Central Banking Archeology. Peter joins David on Macro Musings to discuss the role of money and its relationship to inflation as well as its relationship to the payment system. Specifically, David and Peter discuss the fiscal theory of the price level, how rising indebtedness can signal higher inflation in the future, the implications of the fiscal theory for contemporary fiscal and monetary policy going forward, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Peter’s Twitter: @Stellar_Consult Peter’s website: https://www.centralbankarchaeology.com/ Peter’s Voxeu profile: https://voxeu.org/users/peterstella0 Peter’s Research Gate archive: https://www.researchgate.net/profile/Peter_Stella   Related Links:    *Some Incredible Monetarist Arithmetic* by Pet

Robert Orr is a policy analyst at the Niskanen Center where he focuses on welfare, healthcare, and labor market policy. Robert joins Macro Musings to talk about one of the more important sectors of the US economy, healthcare, and some of the biggest supply side bottlenecks the industry faces. Specifically, David and Robert discuss the uniqueness of the US healthcare system, the reason for massive spending within the healthcare industry, and how to fix the supply bottlenecks that have emerged.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Robert’s Twitter: @Robert_t_Orr Robert’s Niskanen profile: https://www.niskanencenter.org/author/robert-orr/   Related Links:   *The Planning of U.S. Physician Shortages* by Robert Orr https://www.niskanencenter.org/the-planning-of-u-s-physician-shortages/   *The U.S. Has Much to Gain from More Doctors* by Robert Orr https://www.niskanencenter.org/the-u-s-has-much-to-gain-from-more-doctors/   *Unmatched: Repairing the U

George Selgin is the director emeritus of the Cato Institute’s Center for Monetary and Financial Alternatives and is a returning guest to Macro Musings. George rejoins David on the podcast to discuss cryptocurrency, stable coins, CBDCs, and a push for a higher inflation target. Specifically, George and David discuss the category of ‘synthetic commodity money’ and how bitcoin is a potential example, the current state of Bitcoin amidst El Salvador’s transition to Bitcoin as its legal tender, the role of fintechs in the potential future of a Fed central bank digital currency, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   George’s Twitter: @GeorgeSelgin George’s Cato Institute profile: https://www.cato.org/people/george-selgin   Related Links:   *Synthetic Commodity Money* by George Selgin https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2000118   *The Denationalization of Money* by F.A. Hayek https://www.amazon.com/Denationalization-Money-

Peter Conti-Brown is a legal scholar and financial historian at the University of Pennsylvania and is a nonresident fellow in economic studies at the Brookings Institution. Peter’s scholarship focuses on the legal and historical issues of the Federal Reserve system, and he rejoins Macro Musings to talk about the many facets of Fed governance. David and Peter specifically discuss the Federal Reserve’s recent trading scandal, the Fed Chair nomination process, the central bank’s role in fighting climate change, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Peter’s Twitter: @PeterContiBrown Peter’s Brookings profile: https://www.brookings.edu/author/peter-conti-brown/ Peter’s Wharton profile: https://lgst.wharton.upenn.edu/profile/petercb/   Related Links:   *Technocratic Pragmatism, Bureaucratic Expertise, and the Federal Reserve* by Peter Conti-Brown and David Wishnick https://www.yalelawjournal.org/feature/technocratic-pragmatism-bureaucrat

Scott Sumner is David’s colleague and the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center. Scott is also a returning guest to the podcast and joins David on Macro Musings to discuss his new book, The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy. Specifically, David and Scott discuss common misconceptions about the 2008-09 Recession, why bubble narratives too often miss the mark when explaining rising asset prices, whether the Fed’s adoption of average inflation targeting signals that it is moving toward a level target, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Scott’s Twitter: @ScottSumnerTMI Scott’s blog: https://www.themoneyillusion.com/ Scott’s Mercatus profile: https://www.mercatus.org/scholars/scott-sumner   Related Links:   *The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy* By Scott Sumner https://www.mercatus.org/publicatio

Chris Russo is a post-graduate research fellow in the Monetary Policy Program of the Mercatus Center at George Mason University and is a former economist at the New York Federal Reserve Bank. He re-joins Macro Musings to talk about the growing concerns over the US debt ceiling, what it could mean for the economy, and how to fix the issue.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Chris’s Twitter: @RussoEcon Chris’s Mercatus profile: https://www.mercatus.org/scholars/christopher-russo Chris’s Github site: https://christopher-russo.github.io/about/   Related Links:   *Permanently Suspend the Debt Limit* by Christopher Russo https://thehill.com/opinion/finance/553827-permanently-suspend-the-debt-limit   *What the Fed Will Do if Congress Doesn’t Fix the Debt Ceiling* by Christopher Russo https://www.barrons.com/articles/inside-the-feds-playbook-for-a-dollar-default-51622055588   *America’s Need to Pay Its Bills Has Spawned a Political Game* by Jim Tanke

Hanno Lustig is a professor of finance at Stanford University, and a senior fellow at the Stanford Institute for Economic Policy Research. Hanno joins David on Macro Musings to discuss his work on dollar safety, safe assets, convenience yields, and more. More specifically, Hanno and David discuss the dollar dominance in global financial markets, how the US’s status as the world’s safe asset provider reinforces its exorbitant privilege in money markets, whether the countercyclical demand for safe assets can help explain why US inflation has been so low this past decade, how years of low interest rate policy might have contributed to the growing wealth gap, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Hanno’s Twitter: @HannoLustig Hanno’s Stanford profile: https://www.gsb.stanford.edu/faculty-research/faculty/hanno-lustig   Related Links:   *Dollar Safety and the Global Financial Cycle* by Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lu

Megan Greene is a senior fellow at the Harvard Kennedy School of Government and was formerly the global chief economist at Manulife John Hancock Asset Management. Megan is also a returning guest to the podcast and rejoins David to talk about the prospects of central bank digital currency as well as how to conduct climate change policy from a central banking angle.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Megan’s Twitter: @economistmeg Megan’s website: https://economistmeg.com/about/ Megan’s Financial Times archive: https://www.ft.com/megan-greene   Related Links:   *Central Banks Need to Go Slow on Digital Currencies* by Megan Greene https://www.ft.com/content/21e3affe-8c57-4bac-b9c5-21b645e93d7c   *Adapting Central Bank Operations to a Hotter World: Reviewing Some Options* by the Network for Greening the Financial System https://www.ngfs.net/sites/default/files/media/2021/06/17/ngfs_monetary_policy_operations_final.pdf   *Megan Greene and Eric Lone

Joseph Wang is a former senior trader on the open market desk at the Federal Reserve Bank in New York and the author of the book Central Banking 101. He also blogs at fedguy.com and is active on Twitter. Joseph joins Macro Musings to discuss what has happened at the Fed from the operational side, and we consider its implications for money markets. Specifically, Joseph and David discuss recent events from the perspective of the Federal Reserve trading desk, Joseph’s conception of a two-tiered monetary system, continued dollar dominance in global money markets, whether the Fed’s overnight repo facility is truly a temporary facility or trending towards a permanent one, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Joseph’s Twitter: @FedGuy12 Joseph’s website: http://fedguy.com/   Related Links:   *QE Zombifies Money Markets* by Joseph Wang https://fedguy.com/qe-zombifies-money-markets/   *The Gravitational Pull of Zero* by Joseph Wang https://

Philippa Sigl-Glöckner is the director of the German think tank Dezernat Zukunft, or the Institute for Macrofinance, and was formerly a part of the German Federal Ministry of Finance. Philippa joins Macro Musings to talk about fiscal policy in Germany, as well as her new paper, *A New Fiscal Policy for Germany*. Specifically, David and Philippa discuss the historical context for German fiscal policy, the three big economic challenges for Germany, and how the country can achieve full capacity utilization in the future.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Philippa’s Twitter: @PhilippaSigl Philippa’s website: http://philippasigl.com/ Philippa’s Forbes profile: https://www.forbes.com/profile/philippa-sigl-glockner/?sh=383fb0233d30   Related Links:   *A New Fiscal Policy for Germany* by Philippa Sigl-Glöckner, Max Krahe, Pola Schneemelcher, Florian Schuster, Viola Hilbert, Henrika Meyer https://dezernatzukunft.org/wp-content/uploads/2021/07/A-new-f

Jennifer Murtazashvili is an associate professor of political science at the University of Pittsburgh and directs the Center for Governance and Markets. Jennifer is also an expert on all things Afghanistan, given her experience working there and advising governments and international organizations on issues related to Afghanistan. She also has a new book titled, *Land, the State, and War: Property Institutions and Political Order in Afghanistan*, and joins the show to talk about it. Jennifer and David also discuss the recent developments as well as long-term developments in the country and lessons for state capacity building.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Jennifer’s Twitter: @jmurtazashvili Jennifer’s University of Pittsburgh profile: https://gspia.pitt.edu/faculty-and-staff/jennifer-brick-murtazashvili   Related Links:   *Land, the State, and War: Property Institutions and Political Order in Afghanistan* by Jennifer Murtazashvili and Ili

Bill Nelson is a chief economist and an executive vice president at the Bank Policy Institute. Bill previously was a deputy director of the Division of Monetary Affairs at the Federal Reserve Board where his responsibilities included monetary policy analysis, discount window policy analysis, and financial institution supervision. Bill also worked closely with the BIS working groups and the design of liquidity regulations. Bill rejoins David on Macro Musings to discuss his article titled, “I Don't Know Why She Swallowed a Fly,” which looks back at the significant growth of the Federal Reserve, both in its reach and in its size, since the Great Recession of 2007-09. Additionally, Bill and David discuss steps the Fed could take to return to a reasonably sized institution, conducting policy with a light imprint on financial markets.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Bill’s SIFMA profile: https://www.sifma.org/people/bill-nelson/ Bill’s BPI archive

Arthur Turrell is the deputy director at the data science campus for the UK Office of National Statistics (ONS). Arthur is also a former researcher at the Bank of England and a nuclear fusion scientist. He joins Macro Musings to talk about his work at the Bank of England, the future of economic data, and his new book on nuclear fusion titled, *The Star Builders: Nuclear Fusion and the Race to Power the Planet*.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Arthur’s Twitter: @arthurturrell Arthur’s website: http://aeturrell.com/ Arthur’s Bank of England profile: https://www.bankofengland.co.uk/research/researchers/arthur-turrell   Related Links:   *The Star Builders: Nuclear Fusion and the Race to Power the Planet* by Arthur Turrell https://www.simonandschuster.com/books/The-Star-Builders/Arthur-Turrell/9781982130664   *Coding for Economists* by Arthur Turrell https://aeturrell.github.io/coding-for-economists/intro.html   *Why Software Is Eating The Worl

Kathryn Judge is a professor of law at Columbia Law School and editor of the journal of Financial Regulation. Anil Kashyap is a professor of economics and finance at the University of Chicago and is a member of the Bank of England's financial policy committee. Kate and Anil join David on Macro Musings to discuss their work on the Task Force on Financial Stability that recently released a report on how to improve financial stability in the US. Specifically, they discuss the origins of the Task Force on Financial Stability, the dynamics of the Treasury Market over the past year, why money market funds are still vulnerable despite an evolving set of regulations, the importance of rich and timely data for regulatory bodies and Congress, normalizing a financial stability mandate across regulatory bodies, the outlook of financial stability over the next decade, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Kate’s Twitter: @ProfKateJudge Kate’s Co