Macro Musings with David Beckworth

Latest Episodes:

Lars Christensen on AI and its Impact on Monetary Policy and the Broader Field of Economics Jun 10, 2024

Show notes

Lars Christensen is a founding member of the market monetarist tradition, an entrepreneur in the AI space, and is also a returning guest to Macro Musings. Lars rejoins the podcast to talk about AI and its implications for the economy and for monetary policy. David and Lars also discuss the basics and implications of dynamic pricing, AI's growing use within econometric analysis, how AI will impact the Fed and its policymaking, and much more.

Transcript for this week's episode.

Lars's Twitter: @MaMoMVPY

Lars's blog

David Beckworth's Twitter: @DavidBeckworth

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*Less Than Zero: The Case for a Falling Price Level in a Growing Economy* by George Selgin

Timestamps:

(00:00:00) – Intro

(00:01:16) – Lars's Move from Macro to AI

(00:08:02) – The Basics and Implications of Dynamic Pricing

(00:16:17) – Using AI for Econometric Analysis

(00:23:54) – The Implications of AI for the Economics Field

(00:35:45) – How Will AI Impact the Federal Reserve and its Policymaking

(00:38:55) – Deflation as a Response to an AI Driven Productivity Shock

(00:52:08) – Outro

Photo Credit: Nordnet Bank

Ryan Bourne on *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy* Jun 03, 2024

Show notes

Ryan Bourne is the R. Evan Scharf Chair for Public Understanding of Economic at the Cato Institute, and he is also the editor and contributor to a new book titled, *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy.* Ryan joins Macro Musings to talk about this new book, and specifically, the history and functionality of rent and price controls, the basics of dynamic pricing, the root causes of inflation, and a lot more.

Transcript for this week's episode.

Ryan's Twitter: @MrRBourne

Ryan's Cato profile

David Beckworth's Twitter: @DavidBeckworth

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*I, Pencil* by Leonard Read

*Forty Centuries of Wage and Prices Controls: How Not to Fight Inflation* by Robert Schuettinger and Eamonn Butler

*Shock Values: Prices and Inflation in American Democracy* by Carola Binder

Timestamps:

(00:00:00) – Intro

(00:01:05) – The Background Motivation for "The War on Prices*

(00:06:32) – The Definition and Importance of Prices

(00:12:41) – The Parable of "I, Pencil"

(00:18:39) – Rationing on Quality or Quantity: Rent Control

(00:26:39) – The World War II Experience with Price Controls

(00:32:58) – Price and Wage Controls During the Nixon Administration

(00:35:48) – The Effects of a Minimum Wage

(00:38:38) – The Basics of Dynamic Pricing

(00:44:03) – Defining Inflation and Establishing its Sources

(00:56:08) – Was the Recent Inflation Surge Actually Optimal?

(00:59:51) – Outro

George Selgin on Fed Master Accounts, Central Bank Independence, and the Fed's Balance Sheet May 27, 2024

Show notes

George Selgin is a senior fellow and director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute. George is also a frequent guest of the podcast, and he rejoins Macro Musings to talk about some of the recent developments in the monetary and fiscal policy space. Specifically, David and George discuss recent updates regarding Fed master accounts, the problematic aspects of the Fed's balance sheet, why a second Trump term would threaten central bank independence, and much more.

Transcript for this week's episode.

George's Twitter: @GeorgeSelgin

George's Cato profile

David Beckworth's Twitter: @DavidBeckworth

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*Public comments on the Proposed Guidelines for Evaluating Requests for Accounts and Services* by George Selgin

*Custodia Bank Inc v. Federal Reserve Board of Governors* Court documents from the Wyoming District Court

*Annual Report on Open Market Operations (2023)* by the Federal Reserve Bank of New York

*Trump Allies Draw Up Plans to Blunt Fed's Independence* by Andrew Restuccia, Nick Timiraos, and Alex Leary

*Trump Advisers Discuss Penalties for Nations That Move Away From the Dollar* by Saleha Mohsin, Jennfier Jacobs, and Nancy Cook

*Hayek versus Keynes on How the Price Level Ought to Behave* by George Selgin

*The Menace of Fiscal QE* by George Selgin

*George Selgin on False Dawn: The New Deal and the Promise of Recovery* by Macro Musings

Timestamps:

(00:01:36) – Intro

(00:06:26) – Updates on Fed Master Accounts and the Custodia Case

(00:17:57) – Problematic Aspects of the Fed's Balance Sheet

(00:22:50) – The Importance of the Overnight Unsecured Interbank Lending Market

(00:34:26) – Responding to the Jared Bernstein Incident

(00:46:33) – Donald Trump, Central Bank Independence, and Dollar Dominance

(00:56:54) – Outro

Roberto Perli on the Past, Present, and Future of the Fed's Balance Sheet May 20, 2024

Show notes

Roberto Perli is the manager of the System Open Market Account (SOMA) and a senior leader in the New York Fed's Markets Group. In his role, Roberto is responsible for implementing monetary policy at the direction of the Federal Open Market Committee (FOMC). Roberto is also a returning guest to the podcast, and he rejoins Macro Musings to talk about a recent speech he made titled, *Balance Sheet Reduction: Progress to Date and a Look Ahead.* Specifically, David and Roberto discuss the Fed's recent balance sheet activities, the basics and functionality of the overnight reverse repo facility, the importance of slowing down the Fed's balance sheet runoff, and much more.

Transcript for this week's episode.

Roberto's NY Fed profile

Roberto's Twitter: @R_Perli

David Beckworth's Twitter: @DavidBeckworth

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*Balance Sheet Reduction: Progress to Date and a Look Ahead* - Remarks by Roberto Perli at the 2024 Annual Primary Dealer Meeting, Federal Reserve Bank of New York

Timestamps:

(00:00:00) – Intro

(00:04:49) – Breaking Down the Role of SOMA Manager

(00:08:43) – Recapping the Fed's Balance Sheet Activities

(00:11:04) – How to Think About Quantitative Tightening

(00:13:19) – Breaking Down the Overnight Reverse Repo Facility

(00:20:42) – Slowing Down the Runoff and the Future of QT

(00:26:48) – How to Determine the Critical Level of Reserves

(00:33:03) – The Structural Demand for Bank Reserves Over Time

(00:38:55) – The Advantages of the Floor Operating System

(00:47:49) – Reserve Supply Focus Moving Forward

(00:49:44) – Outro

Mary Daly on Fed Policy, the Economic Impacts of AI, and the Future of the Fed's Framework May 13, 2024

Show notes

Mary Daly is the president and CEO of the Federal Reserve Bank of San Francisco, a voting member of the Federal Open Market Committee (FOMC), and is also a 28-year veteran of the Federal Reserve System. President Daly joins David for this special live episode of Macro Musings to talk about her non-linear career path to the world of monetary policy, the long-term economic impacts of AI, the future outlook for Fed policy and the Fed's framework, and much more.

Transcript for this week's episode.

Mary's Twitter: @MaryDalyEcon

Mary's San Francisco Fed profile

David Beckworth's Twitter: @DavidBeckworth

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

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Check out our Macro Musings merch!

Timestamps:

(00:00:00) – Intro

(00:01:30) – Mary Daly's Background

(00:06:09) – Recent Inflationary Trends and the Future of Fed Policy

(00:15:39) – The Trajectory of R-Star Over the Medium to Long-Run

(00:19:06) – The Long-Term Economic Impacts of AI

(00:29:51) – Expectations for the Upcoming Fed Framework Review

(00:33:35) – Prospects for Nominal GDP Targeting at the Fed

(00:36:58) – Fed Policymaking During an Election Year

(00:38:16) – Audience Q&A Period

(01:01:09) – Outro

Dan Katz and Stephen Miran on Reforming the Federal Reserve's Governance May 06, 2024

Show notes

Dan Katz and Stephen Miran are former senior advisors for the US Treasury Department and are currently adjunct fellows at the Manhattan Institute. Dan and Stephen have also written a new paper titled, *Reform the Federal Reserve's Governance to Deliver Better Monetary Outcomes,* and they join Macro Musings to talk about this paper and the proposed reforms for the Federal Reserve outlined in it. Specifically, Dan, Steve, and David discuss the ever-expanding reach of the Fed, its role as debt manager and bank regulator, the current issue with the central bank's personnel, and a lot more.

Transcript for this week's episode.

Stephen's Twitter: @SteveMiran

Stephen's Manhattan Institute profile

Dan's Twitter: @DanielScottKatz

Dan's Manhattan Institute profile

David Beckworth's Twitter: @DavidBeckworth

Check out our new AI chatbot: the Macro Musebot!

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Timestamps:

(00:00:00) – Intro

(00:04:20) – The Fed's Issue of Picking Winners and Losers

(00:09:17) – The Fed's Role as Bank Regulator

(00:12:53) – The Ever-Expanding Reach of the Fed

(00:17:50) – The Fed as a Debt Manager

(00:23:33) – What Should the Fed Do in a Zero Lower Bound Environment

(00:27:26) – Personnel is Policy: The Issue with Fed Personnel

(00:29:55) – Options for Personnel Reform at the Fed

(00:38:22) – Making the Fed President Selection Process More Robust

(00:47:28) – The Nature of Debate at the Fed

(00:50:53) – The Scope for Change at the Fed

(00:53:21) – Outro

BONUS: Richard Clarida on His Musical Interests and *Time No Changes* May 01, 2024

Show notes

Richard Clarida is a professor of economics at Columbia University, a managing director at PIMCO, and was most recently the Vice Chair of the Federal Reserve Board of Governors. Richard rejoins David for this special bonus segment to talk about his interest in music and his first studio album, *Time No Changes.*

Richard's Federal Reserve profile

Richard's PIMCO archive

David Beckworth's Twitter: @DavidBeckworth

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Related Links:

*Time No Changes* by Richard Clarida

*Richard Clarida on FAIT, R-Star, and the Future of the Fed's Framework* by Macro Musings

Richard Clarida on FAIT, R-Star, and the Future of the Fed's Framework Apr 29, 2024

Show notes

Richard Clarida is a well-known academic and policymaker who most recently was the Vice Chair of the Federal Reserve Board of Governors. Richard is currently a professor of economics at Columbia university and is also a managing director at PIMCO. Richard joins David on Macro Musings to talk about his academic and policy work, as well as his outlook for FAIT, the Fed's framework review, the future of R-Star, and more.

Transcript for this week's episode.

Richard's Federal Reserve profile

Richard's PIMCO archive

David Beckworth's Twitter: @DavidBeckworth

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

Join the Macro Musings mailing list!

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Related Links:

*How the Bundesbank Conducts Monetary Policy* by Richard Clarida and Mark Gertler

*The Science of Monetary Policy: A New Keynesian Perspective* by Richard Clarida, Jordi Gali, and Mark Gertler

*Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory* by Richard Clarida, Jordi Gali, and Mark Gertler

*Monetary Policy Rules in Practice: Some International Evidence* by Richard Clarida, Jordi Gali, and Mark Gertler

Timestamps:

(00:00:00) – Intro

(00:03:04) – Richard Clarida's Background

(00:11:37) – Bridging the Gap Between Academic Economics and Real-World Markets

(00:21:50) – Richard's Journey Through the Policy World

(00:36:29) – Constructing the Fed's FAIT Framework

(00:40:53) – Evaluating the Results of the FAIT Framework

(00:54:17) – The Future of the Fed's Framework

(00:57:08) – The Future of R-Star

(01:00:50) – Outro

Saleha Mohsin on *Paper Soldiers: How the Weaponization of the Dollar Changed the World Order* Apr 22, 2024

Show notes

Saleha Mohsin is a senior Washington correspondent for Bloomberg News, where she covers policy, politics, and power in Washington, DC. Saleha is also the author of a new book titled, *Paper Soldiers: How the Weaponization of the Dollar Changed the World Order,* and she joins David on Macro Musings to talk about it. Specifically, David and Saleha also discuss the intelligence and enforcement tools of the US Treasury, the basics and importance of SWIFT, the effectiveness of US sanctions, and a lot more.

Transcript for this week's episode.

Saleha's Twitter: @SalehaMohsin

Saleha's Bloomberg archive

David Beckworth's Twitter: @DavidBeckworth

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

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*The Big Take* hosted by Saleha Mohsin

Timestamps:

(00:00:00) – Intro

(00:03:43) – The Weaponization of the Dollar on the Global Stage

(00:08:55) – The Intelligence and Enforcement Tools of the US Treasury Department

(00:13:10) – Breaking Down SWIFT and Its Importance

(00:18:27) – Sanctioning Russian Oligarchs

(00:22:42) – The Importance and Significance of Robert Rubin

(00:25:29) – The George W. Bush of the Treasury Department

(00:37:42) – Breaking Down the Joint Comprehensive Plan of Action

(00:41:06) – The Trump Administration, China, and the Rise of Populism

(00:45:30) – Evaluating the Effectiveness of the Russia Sanctions

(00:51:18) – Threats to the US in the Future

(00:52:48) – Outro

Josh Hendrickson on the Treasury Standard and Global Dollar Dominance Apr 15, 2024

Show notes

Josh Hendrickson is the chair of the department of economics at the University of Mississippi and is the author of a new paper that looks at dollar dominance through the broad historical perspective of what is called the "Treasury Standard." Josh is also a returning guest to Macro Musings, and he rejoins the podcast to talk about this paper and the Treasury Standard concept. David and Josh also discuss the state's monopoly over money, the path to global dollar dominance, the path dependency of the dollar system, and a lot more.

Transcript for this week's episode.

Josh's Twitter: @RebelEconProf

Josh's Ole Miss profile

Josh's joint Substack

David Beckworth's Twitter: @DavidBeckworth

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Related Links:

*The Treasury Standard: Causes and Consequences* by Joshua Hendrickson

*If Things Are So Great, Why Don't People Think So?* by Josh Hendrickson

*The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly* by Marijn Bolhuis, Judd Cramer, Karl Schulz, and Lawrence Summers

*On a Correct Measure of Inflation* by Armen Alchian and Benjamin Klein