Macro Musings with David Beckworth

Joe Gagnon is a senior fellow at the Peterson Institute for International Economics and was formerly a senior staffer at the Federal Reserve Board of Governors. Joe is also a returning guest to the podcast, and he rejoins Macro Musings to take a look back on the past few years and to discuss his new paper on excess unemployment over the past 25 years. Specifically, David and Joe also discuss the movement of the natural rate of unemployment over time, alternative explanations for the flattening of the Phillips curve, policy implications for the Fed moving forward, and more.

Transcript for the episode can be found here.

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Joe’s PIIE profile

Joe’s Twitter: @GagnonMacro

David’s Twitter: @DavidBeckworth

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Related Links:

*25 Years of Excess Unemployment in Advanced Economies: Lessons for Monetary Policy* by Joseph Gagnon and Madi Sarsenbayev

*Economists are Slightly Better at Predicting Inflation Than Consumers* by Joseph Gagnon and Madi Sarsenbayev

*Who are the Better Forecasters of Inflation, Bond Traders or Economists?* by Joseph Gagnon and Madi Sarsenbayev

*The Slope of the Phillips Curve: Evidence form U.S. States* by Jonathon Hazell, Juan Herreno, Emi Nakamura, and Jon Steinsson

*The Macroeconomics of Low Inflation* by George Akerlof, William Dickens, and George Perry

*Measuring Monetary Policy: the NGDP Gap* by David Beckworth

Bill Nelson is the Chief Economist and an Executive Vice President at the Bank Policy Institute. Bill previously was a deputy director at 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. He also worked closely with the BIS on the design of liquidity regulation. Bill joins David on Macro Musings to discuss the Fed's balance sheet, its reduction plans and how the Fed fell behind the curve. Specifically, David and Bill get into whether the Fed regretted its premature tightening period from 2015 to 2018, how the Fed’s focus on the baseline outlook left it not resilient to alternative developments, how concerns over another taper tantrum impacted the Fed’s decision-making, the Fed’s handling of its FAIT framework, and much more.

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Transcript for the episode can be found here.

Bill’s Bank Policy Institute profile: https://bpi.com/people/bill-nelson/

Bill’s American Banker archive: https://www.americanbanker.com/author/william-nelson-ab3618

Related Links:

“Plane Crashes and Falling Behind the Curve” by Bill Nelson

https://www.linkedin.com/pulse/plane-crashes-falling-behind-curve-bill-nelson/?trk=articles_directory

“Guest post: A former Fed insider explains the internal debate over QE3” by Bill Nelson

https://www.ft.com/content/254befb7-10f8-3f2c-a9a8-bc6226a6f1db

"The Potential Ineffectiveness of Policy at the Zero Bound" (Memo to the Federal Reserve Board of Governors) by Bill Nelson and Brian Sack

https://www.dropbox.com/s/fv21og7vpx1izml/BillNelsonMemo.pdf?dl=0

“Interpreting the Significance of the Lagged Interest Rate in Estimated Monetary Policy Rules” by William B. English, William R. Nelson, and Brian P. Sack

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=314425

David’s Twitter: @DavidBeckworth

David’s blog: http://macromarketmusings.blogspot.com/

Christine McDaniel is a senior research fellow at the Mercatus Center where she focuses on trade and intellectual property rights issues. Christine previously held several positions in the US government, including deputy assistant secretary at the Treasury Department and senior trade economist in the White House Council of Economic Advisors. She has also worked in the economic offices of the US Department of Commerce, US Trade Representative, and the US International Trade Commission. Christine rejoins Macro Musings to talk about the economic sanctions applied to Russia, and their implication for the Russian economy and globalization more generally. Specifically, David and Christine also discuss the structure and effectiveness of the Russia sanctions, the war’s heavy impact on food shortages, the role of dollar dominance in geopolitics, and more.

Transcript for the episode can be found here.

Christine’s Twitter: @christinemcdan

Christine’s Mercatus profile: https://www.mercatus.org/scholars/christine-mcdaniel

Related Links:

*We’ve Never Seen a Country Go Backwards as Quickly as Russia* by Christine McDaniel

https://thehill.com/opinion/international/3487291-weve-never-seen-a-country-go-backwards-as-quickly-as-russia/

*Estimating the Economic Effects of Sanctions on Russia: An Allied Trade Embargo* by Kornel Mahlstein, Christine McDaniel, Simon Schropp, and Marinos Tsigas

https://cadmus.eui.eu/bitstream/handle/1814/74493/RSC_WP_2022_36.pdf?sequence=1&isAllowed=y

*Potential Economic Effects of Sanctions on Russia: An Allied Trade Embargo* by Kornel Mahlstein, Christine McDaniel, Simon Schropp, and Marinos Tsigas

https://voxeu.org/article/potential-economic-effects-allied-trade-embargo-russia

*US Sanctions Reinforce the Dollar’s Dominance* by Michael P. Dooley, David Folkerts-Landau, and Peter M. Garber

https://www.nber.org/papers/w29943#:~:text=Recent%20sanctions%20on%20the%20use,shock%20absorber%E2%80%9D%20for%20international%20payments.

David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

William Diamond is an Assistant Professor of Finance at the Wharton School of Business at the University of Pennsylvania. Will joins David on Macro Musings to discuss safe assets, convenience yields, bubbles and public debt and the implications for policy. Specifically, David and Will get into competing theories of interest rates and the rise of New Keynesian thinking, the role of the dollar in the global financial system, the drivers behind the growth in US debt, how the construction of risk-free interest rates unaffected by convenience yields on safe assets can improve our understanding of the financial system in times of stress, and much more.

Check out Ideas of India: https://www.discoursemagazine.com/tag/ideas-of-india-podcast/, and subscribe to Ideas of India on your favorite podcast app.

Transcript for the episode can be found here.

Will’s Twitter: @wdiamond_econ

Will’s Wharton profile: https://fnce.wharton.upenn.edu/profile/diamondw/#research

Related Links:

*Threats to Central Bank Independence: High-Frequency Identification with Twitter* by Francesco Bianchi, Thilo Kind & Howard Kung

https://www.nber.org/papers/w26308

*Safety Transformation and the Structure of the Financial System* by Will Diamond

https://faculty.wharton.upenn.edu/wp-content/uploads/2017/07/modelwriteupnew23.pdf

*From World Banker to World Venture Capitalist: The US External Adjustment and the Exorbitant Privilege* by Helene Ray and P.O. Gourinchas

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=788428

*Rational Bubbles and Public Debt Policy: A Quantitative Analysis* by David Domeij and Tore Ellingsen

https://www.sciencedirect.com/science/article/abs/pii/S0304393218301909

*Liquidity Premiums on Government Debt and the Fiscal Theory of the Price Level* by Aleksander Berentsen and Christopher J. Waller

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2943241

*Risk Free Interest Rates* by Jules H. van Binsbergen, Will Diamond, and Marco Grotteria

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3242836

*Risk-Free Rates and Convenience Yields Around the World* by Will Diamond, Peter Van Tassel

https://faculty.wharton.upenn.edu/wp-content/uploads/2021/11/newdraft_11132021formatfix.pdf

David’s Twitter: @DavidBeckworth

David’s blog: http://macromarketmusings.blogspot.com/

Emily Hamilton is a senior research fellow and director of the Urbanity Project at the Mercatus Center at George Mason University. Emily’s research focuses on urban economics and land use policy, and she joins Macro Musings to talk about housing in the United States. Specifically, David and Emily discuss many of the issues present within the American housing market, why we should care about rampant housing shortages, and the most effective avenues we can pursue for largescale reform.

Check out Conversations with Tyler: https://conversationswithtyler.com, and subscribe to Conversations with Tyler on your favorite podcast app.

Transcript for the episode can be found here.

Emily’s Twitter: @ebwhamilton

Emily’s Mercatus profile: https://www.mercatus.org/scholars/emily-hamilton

Related Links:

*Light Touch Density: A Series of Policy Briefs on Zoning, Land Use, and a Solution to Help Alleviate the Nation’s Housing Shortage* by Edward Pinto, Tobias Peter, and Emily Hamilton

https://www.aei.org/wp-content/uploads/2022/01/Light-Touch-Density-Compiled-FINAL-1.12.2022.pdf?x91208

*2019 Survey of Consumer Finances* by the Federal Reserve Board of Governors

https://www.federalreserve.gov/econres/scfindex.htm

David’s Twitter: @DavidBeckworth

David’s blog: http://macromarketmusings.blogspot.com/