Macro Musings with David Beckworth

Latest Episodes:

David Beckworth on Nominal GDP Targeting in the Wake of the COVID-19 Crisis Jul 27, 2020

Show notes

In this special Macro Musings episode, David is back in the spotlight, as he is interviewed by Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth, as a guest on her *Stay-at-Home Macro Podcast*. David and Claudia discuss nominal GDP targeting at length, as they dive into what it is, why it's important, and how it could be implemented in the wake of COVID-19. They also talk about the communication problems related to introducing NGDP targeting as well as David's proposal for reforming the Fed's current policies.

Special thank you to Claudia for letting us air this episode as a part of the Macro Musings catalog!

Transcript for the episode can be found here.

David's Twitter: @DavidBeckworth

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

David's Mercatus profile: https://www.mercatus.org/scholars/david-beckworth

Claudia's Twitter: @Claudia_Sahm

Claudia's Equitable Growth profile: https://equitablegrowth.org/people/claudia-sahm/

Related Links:

Link to the original podcast: https://www.youtube.com/watch?v=1rHBQ-o8vDA

Homepage for Claudia's podcast: http://macromomblog.com/sahmpodcast/

*Facts, Fears, and Functionality of NGDP Level Targeting* by David Beckworth

https://www.mercatus.org/publications/monetary-policy/facts-fears-and-functionality-ngdp-level-targeting

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

https://www.mercatus.org/publications/monetary-policy/measuring-monetary-policy-ngdp-gap

*COVID-19 Pandemic, Direct Cash Transfers, and the Federal Reserve* by David Beckworth

https://www.mercatus.org/publications/covid-19-policy-brief-series/covid-19-pandemic-direct-cash-transfers-and-federal

*NGDP Targeting and the Public* by Carola Binder

https://www.cato.org/cato-journal/spring/summer-2020/ngdp-targeting-public

Bill Nelson on the Fed's Policy Tools in the Post-COVID Economy Jul 20, 2020

Show notes

Bill Nelson is a Chief Economist and Executive Vice President at the Bank Policy Institute, and formerly a Deputy Director of the Division of Monetary Affairs at the Federal Reserve Board, where his responsibilities included monetary policy analysis, discount window analysis, and financial institution supervision. Bill also worked closely with the Bank for International Settlements on liquidity regulations. Bill is a previous guest of Macro Musings, and he returns to the podcast to discuss the Fed's increasing role in credit policy, the prospects for yield curve control and negative interest rates, and why makeup policy would be uniquely suited to the challenges presently facing the economy.

Transcript for the episode can be found here.

Bill's SIFMA profile: https://www.sifma.org/people/bill-nelson/

Bill's BPI archive: https://bpi.com/tag/bill-nelson/

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

Related Links:

*Live Live Jay Powell, the New Monarch of the Bond Market* by Robin Wigglesworth

https://www.ft.com/content/5db9d0f1-3742-49f0-a6cd-16c471875b5e

*Federal Reserve's "Strategies for Targeting Interest Rates Out the Yield Curve"* prepared by David Bowman, Christopher Erceg, and Mike Leahy, with contributions from William English, Edward Nelson, David Reifschneider, Nathan Sheets, and David Wilcox of Board staff and Brian Sack, Spence Hilton, Allan Malz, Frank Keane, Matt Raskin, Julie Remache, Josh Frost, Nate Wuerffel, Angela O'Connor and Richard Dzina of FRBNY staff

https://www.federalreserve.gov/monetarypolicy/files/FOMC20101013memo08.pdf

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

Jens Van't Klooster on ECB Bond Purchasing and the Myth of Central Bank Neutrality Jul 13, 2020

Show notes

Jens Van't Klooster is a postdoctoral fellow at KU Leuven and is also a member of the research group, A New Normative Framework for Financial Debt at the University of Amsterdam. Jens has recently coauthored an article titled *The Myth of Market Neutrality: A Comparative Study of the European Central Bank's and Swiss National Bank's Corporate Security Purchases.* He joins Macro Musings to talk about this article and some of his other work on central bank purchases and what it may mean for the Fed's purchase of corporate bonds.

Transcript for the episode can be found here.

Jens's Twitter: @jvklooster

Jens's website: https://jensvantklooster.com/

Related Links:

*The Myth of Market Neutrality: A Comparative Study of the European Central Bank's and Swiss National Bank's Corporate Security Purchases* by Jens Van't Klooster and Clement Fontan

https://www.tandfonline.com/doi/full/10.1080/13563467.2019.1657077

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

Matthew Klein on Global Trade, Inequality, and International Conflict Jul 06, 2020

Show notes

Matthew Klein is an economics commentator at Barron's and is the author of a new book with Michael Pettis titled, *Trade Wars are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace.* Matthew is a returning guest to Macro Musings and he joins once again to talk about his book and the domestic roots of international trade conflicts – in the past as well as today. Specifically, David and Matthew also discuss the history of how industrialized strategies, in countries such as China, have set the stage for trade conflicts in the present day.

Transcript for the episode can be found here.

Matthew's Twitter: @M_C_Klein

Matthew's Barron's profile: https://www.barrons.com/authors/8566

Related Links:

*Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace* by Matthew Klein and Michael Pettis

https://yalebooks.yale.edu/book/9780300244175/trade-wars-are-class-wars

*The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy* by Michael Pettis

https://press.princeton.edu/books/hardcover/9780691158686/the-great-rebalancing

*The Man Who Knew: The Life and Times of Alan Greenspan* by Sebastian Mallaby

https://www.cfr.org/book/man-who-knew

*Imperialism: A Study* by John Hobson

https://oll.libertyfund.org/titles/hobson-imperialism-a-study

*Communist China's Capitalism: The Highest Stage of Capitalist Imperialism* by Kenneth Austin

https://www.worldeconomics.com/Journal/ViewArticle.aspx?AID=455

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

Stephen Kirchner on Australian Monetary Policy in the Wake of the Great Recession Jun 29, 2020

Show notes

Stephen Kirchner is a program director for trade and investment at the United States Center at the University of Sydney, and he was written widely on financial markets and economy policy in Australia. Stephen joins Macro Musings to talk about the journey of monetary policy in Australia that has transpired throughout the last few decades. Specifically, David and Stephen discuss the structure of the Reserve Bank of the Australia, the history of its inflation target, how Australia was able to avoid the worst of the Great Recession, and the actions they have taken to in response to the COVID crisis.

Transcript for the episode can be found here.

Stephen's Twitter: @insteconomics

Stephen's US Studies Center profile: https://www.ussc.edu.au/people/stephen-kirchner

Stephen's Substack page: https://stephenkirchner.substack.com/

Related Links:

*Money Too Tight to Mention: The Reserve Bank of Australia's Financial Stability Mandate and Low Inflation* by Stephen Kirchner

http://www.institutional-economics.com/images/uploads/EAP.pdf

*Cost-Benefit Analysis of Leaning against the Wind* by Trent Saunders and Peter Tulip

https://rba.gov.au/publications/rdp/2019/2019-05.html

*Twenty-five Years of Inflation Targeting in Australia: Are There Better Alternatives for the Next 25 Years?* by Warwick McKibbin and Augustus Panton

https://www.brookings.edu/research/twenty-five-years-of-inflation-targeting-in-australia-are-there-better-alternatives-for-the-next-25-years/

*The RBA Needs a New Post-virus Monetary Policy Game* by Richard Holden, Warwick McKibbin, and John Quiggin

https://www.afr.com/policy/economy/the-rba-needs-a-new-post-virus-monetary-policy-game-20200505-p54ptw

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

Daniela Gabor on Financial Globalization, Capital Controls, and the Critical Macrofinance Framework Jun 22, 2020

Show notes

Daniela Gabor is a professor of economics and macrofinance at the University of West England at Bristol, where she works on shadow banking, capital markets, and transnational banking. Daniela is also a returning guest to the podcast, and she has a new paper out on the burgeoning field of critical macrofinance and how it sheds light on the past great financial crisis (2007-2009) and the present COVID-19 crisis. She re-joins Macro Musings to discuss this paper and how it can offer important insight into the current global economic environment.

Transcript for the episode can be found here.

Daniela's Twitter: @DanielaGabor

Daniela's UWE Bristol profile: https://people.uwe.ac.uk/Person/DanielaGabor

Related Links:

*Critical Macro-Finance: A Theoretical Lens* by Daniela Gabor

http://financeandsociety.ed.ac.uk/article/view/4408

*The Role of Time-Critical Liquidity in Financial Markets* by David Marshall and Robert Steigerwald

https://www.chicagofed.org/publications/economic-perspectives/2013/2q-marshall-steigerwald

*The Growth of Financial Banking* by Anna Youngman

https://www.journals.uchicago.edu/doi/abs/10.1086/251239?mobileUi=0&

*Daniela Gabor on Safe Assets and Shadow Banking*

https://macromusings.libsyn.com/103-daniela-gabor-on-safe-assets-and-shadow-banking

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

Darrell Duffie on Treasury Markets and the Post-COVID Path to Financial Stability Jun 15, 2020

Show notes

Darrell Duffie is a professor of finance at Stanford University, and he joins Macro Musings to discuss the treasury market problems that emerged in March 2020 and what can be done to avoid them in the future. Specifically, Darrell and David lay out the current state of financial markets, the ability of treasury markets, as currently designed, to handle demand shocks, and how central banking reforms can better ensure financial stability in the future.

Register here for the Cato Institute/Mercatus Center Webinar Series - *A Fed for Next Time: Ideas for a Crisis‐Ready Central Bank*: https://www.cato.org/events/fed-next-time-ideas-crisis-ready-central-bank

Transcript for the episode can be found here.

Darrell's Twitter: @DuffieDarrell

Darrell's website: https://www.darrellduffie.com/

Darrell's Stanford profile: https://www.gsb.stanford.edu/faculty-research/faculty/darrell-duffie

Related Links:

Bonus segment with Darrell:

https://youtu.be/0Y3MTjgbP74

*Pass-through Efficiency in the Fed's New Monetary Policy Setting* by Darrell Duffie and Arvind Krishnamurthy

https://www.gsb.stanford.edu/faculty-research/publications/passthrough-efficiency-feds-new-monetary-policy-setting

*The Failure Mechanics of Dealer Banks* by Darrell Duffie

https://www.aeaweb.org/articles?id=10.1257/jep.24.1.51

*Still the World's Safe Haven? Redesigning the U.S. Treasury Market after the COVID-19 Crisis* by Darrell Duffie

https://www.brookings.edu/research/still-the-worlds-safe-haven/

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

Peter Stella on the Fed's Off-Balance Sheet Transactions and Public Financing of the COVID-19 Crisis Jun 08, 2020

Show notes

Peter Stella is a former IMF official, where he led the Central Banking and Monetary and Foreign Exchange divisions, and he now hosts a webpage titled *Central Bank Archeology*. Peter is also a former guest of Macro Musings, and rejoins to talk about the COVID-19 crisis, central bank balance sheets, and more. David and Peter also discuss the dangers and challenges of the Fed's off-balance sheet transactions, how the government should approach crisis financing, and who should be managing the country's public debt.

The transcript for the episode can be found here.

Peter's Twitter: @Stellar_Consult

Peter's Voxeu profile: https://voxeu.org/users/peterstella0

Peter's Research Gate archive: https://www.researchgate.net/profile/Peter_Stella

Related Links:

Peter's *Central Bank Archaeology* website: https://www.centralbankarchaeology.com/

*Macro Musings: Peter Stella on Debt, Safe Assets, and Central Bank Operations*

https://macromusings.libsyn.com/144-peter-stella-on-debt-safe-assets-and-central-bank-operations

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

Adam Tooze on Dollar Dominance, the Eurozone, and the Future of Global Finance Jun 01, 2020

Show notes

Adam Tooze is a professor of history at Columbia University, and is the author of many books, including his popular account of the 2007-2009 crisis, titled Crashed: How a Decade of Financial Crisis Changed the World. Adam joins David on Macro Musings to discuss the COVID-19 crisis, the Eurozone, and the future of central banking. Specifically, Adam and David break down recent events and risks in the global financial system, the future of the dollar as reserve currency, and the implications of the recent German-Franco debt deal for the Eurozone.

Transcript for the episode can be found here.

Adam's Twitter: @adam_tooze

Adam's Columbia profile: https://history.columbia.edu/faculty/adam-tooze/

Adam's website: https://adamtooze.com/

Related Links:

*How Coronavirus Almost Brought Down the Global Financial System* by Adam Tooze

https://www.theguardian.com/business/2020/apr/14/how-coronavirus-almost-brought-down-the-global-financial-system)

*The Death of the Central Bank Myth* by Adam Tooze

https://foreignpolicy.com/2020/05/13/european-central-bank-myth-monetary-policy-german-court-ruling/

*Still the World's Safe Haven?* by Darrell Duffie

https://www.brookings.edu/wp-content/uploads/2020/05/WP62_Duffie_updated.pdf

*Exchange Arrangements Entering the 21st Century: Which Anchor Will Hold?* by Ethan Ilzetzki, Carmen M. Reinhart, Kenneth S. Rogoff

https://www.nber.org/papers/w23134

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

Alp Simsek on a Risk-Centric View of Demand, Recession, and Speculation May 27, 2020

Show notes

Alp Simsek is an associate professor of economics at MIT, and joins Macro Musings to talk about the link between financial markets, uncertainty and the COVID-19 crisis. Specifically, David and Alp discuss the dual absorption problem within financial markets, how supply shocks and demand shocks have inescapably become interwoven phenomenon, and why we should look to using macroprudential policy in the future.

The transcript for the episode can be found here.

Alp's Twitter: @alpsimsek_econ

Alp's MIT profile: https://economics.mit.edu/faculty/asimsek

Related Links:

Bonus segment with Alp: https://youtu.be/eoGxYcWmH9E

*A Risk-centric Model of Demand Recessions and Speculation* by Ricardo Caballero and Alp Simsek

https://www.nber.org/papers/w23614

*A Model of Asset Price Spirals and Aggregate Demand Amplification of a 'COVID-19' Shock* by Ricardo Caballero and Alp Simsek

https://www.nber.org/papers/w27044

*Prudential Monetary Policy* by Ricardo Caballero and Alp Simsek

https://www.nber.org/papers/w25977

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