Macro Musings with David Beckworth

Latest Episodes:

Thomas Hoenig on Bank Capitalization and Fed Policy after COVID-19 May 25, 2020

Show notes

Thomas Hoenig is a former vice chair of the FDIC, former president of the Kansas City Federal Reserve Bank, and is currently a distinguished senior fellow at the Mercatus Center at George Mason University. Tom's research has focused on the long-term impact of the politicization of financial services, as well as the effects of government grant privileges on market performance. Tom joins David on Macro Musings to talk about COVID-19, the Fed's response to its economic impact, and the current state of banking in the United States.

Transcript for the episode can be found here.

Thomas's Twitter: @tom_hoenig

Thomas's Mercatus profile: https://www.mercatus.org/scholars/thomas-hoenig

Related Links:

Bonus segment with Thomas: https://youtu.be/CrA1WRtu0jc

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

Scott Sumner on the Government's Response to COVID-19 and the Future of Level Targeting May 20, 2020

Show notes

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University, Professor Emeritus of economics at Bentley University, and a research fellow at the Independent Institute. As a returning guest to the podcast, Scott joins Macro Musings to give his latest thoughts on the COVID-19 crisis and its implications for monetary policy. Specifically, David and Scott discuss how the Fed can conduct more aggressive monetary policy, what a level targeting regime should look like in the future, and the current progression toward negative interest rates.

Transcript for the episode can be found here.

Scott's Mercatus profile: https://www.mercatus.org/scholars/scott-sumner

Scott's blog: https://www.themoneyillusion.com/

*Reforming the Fed's Toolkit and Quantitative Easing Practices: A Plan to Achieve Level Targeting* by Scott Sumner and Patrick Horan

https://www.mercatus.org/publications/covid-19-policy-brief-series/reforming-feds-toolkit-and-quantitative-easing-practices

*Negative Interest Rates and Negative IOER* by Scott Sumner

https://www.econlib.org/negative-interest-rates-and-negative-ioer/

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

Lev Menand on the Fed's Lending Facilities and the Legal Concerns Surrounding Them May 18, 2020

Show notes

Lev Menand is a legal scholar at Columbia Law School and has previously worked for the New York Fed, the US Treasury Department, and the Financial Stability Oversight Council (FSOC). Lev Joins Macro Musings to talk about his new paper, *Unappropriated Dollars: The Fed's Ad Hoc Lending Facilities and the Rules that Govern Them*. Specifically, David and Lev discuss opening up public Fed bank accounts, the importance of liquidity and credit facilities, and how Congress is using the CARES Act to skirt the Fed's current legal mandates.

Transcript for the episode can be found here.

Lev's Twitter: @LevMenand

Lev's Columbia Law profile: https://www.law.columbia.edu/faculty/lev-menand

Related Links:

Bonus segment with Lev: https://youtu.be/N9qndjjju9A

*Unappropriated Dollars: The Fed's Ad Hoc Lending Facilities and the Rules That Govern Them* by Lev Menand

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3602740

*FedAccounts* by Morgan Ricks, John Crawford, and Lev Menand

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3192162

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

Martin Hellwig on the Recent German Constitutional Court Ruling and Its Potential Eurozone Implications May 13, 2020

Show notes

Martin Hellwig is the director of the Max Planck Institute for Research on Collective Goods, and he joins Macro Musings to talk about the Eurozone and the implications of the recent German Constitutional Court (GCC) ruling for the future of the monetary union. David and Martin specifically discuss the background of the perceived Eurozone crisis, the power struggle between the GCC and the European Court of Justice, and how this case may lead to a total breakdown of the Eurozone.

Transcript for the episode can be found here.

Martin's MPI profile: https://www.coll.mpg.de/martin-hellwig

Related Links:

Bonus segment with Martin: https://youtu.be/1POrO_8VcM0

*The Leverage Ratchet Effect* by Anat Admati, Peter DeMarzo, Martin Hellwig and Paul Pfleiderer

https://www.gsb.stanford.edu/faculty-research/working-papers/leverage-ratchet-effect

*German Court Has Set a Bomb Under the EU Legal Order* by Martin Sandbu

https://www.ft.com/content/79484c01-b66b-4f81-bdc6-fd4def940821

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

Nathan Tankus on Public Finance in the COVID-19 Crisis: A Consolidated Budget Balance View and its Implications for Policy May 11, 2020

Show notes

Nathan Tankus is the director of research at the Modern Money Network, and a research fellow at the Global Institute for Sustainable Prosperity. Nathan is also the author of a number of articles on the Fed's recent activity at his Substack page titled "Notes on the Crises." Nathan joins Macro Musings to talk about the post-Keynesian view of money, central bank independence, and the consolidated view of public finance, as well as evaluate the policy responses by the Fed and Congress to COVID-19.

Transcript for the episode can be found here.

Nathan's Twitter: @NathanTankus

Nathan's Substack page: https://nathantankus.substack.com/

Related Links:

Bonus segment with Nathan: https://youtu.be/VPl0LYgttYI

*Monetary, Credit, and Fiscal Policies: A Collection of Statements Submitted to the Subcommittee on Monetary, Credit, and Fiscal Policies by Government Officials, Bankers, Economists, and Others (specifically a comment made by Albert G. Hart) by the Joint Committee on the Economic Report

https://fraser.stlouisfed.org/files/docs/historical/congressional/1949jec_mcfpstate.pdf#page=332

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

Anat Admati on the Perils of Corporate Debt and How COVID-19 Relief Efforts Have Gone Wrong May 06, 2020

Show notes

Anat Admati is a professor of finance and economics at Stanford University, and is well-known for her work on leveraging debt in our financial system and how it makes our economy more susceptible to shocks. She's also a co-author of the popular book, *The Banker's New Clothes: What Went Wrong with Banking and What to Do About It*. Anat joins Macro Musings again to talk about the COVID-19 crisis from the debt perspective, how the Fed and Congress have responded so far, and how their relief efforts should have been focused differently.

The transcript for the episode can be found here.

Anat's Twitter: @anatadmati

Anat's website: https://admati.people.stanford.edu/

Related Links:

Bonus segment with Anat: https://youtu.be/4xHmmgoURqg

*The Banker's New Clothes: What's Wrong with Banking and What to Do about It* by Anat Admati and Martin Hellwig

https://press.princeton.edu/books/paperback/9780691162386/the-bankers-new-clothes

*The Leverage Ratchet Effect* by Anat Admati, Peter DeMarzo, Martin Hellwig, and Paul Pfleiderer

https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12588

*Macrofinancial History and the New Business Cycle Facts* by Oscar Jorda, Mortiz Schularick, and Alan Taylor

https://www.frbsf.org/economic-research/files/wp2016-23.pdf

*Coronavirus Crisis Lays Bare the Risks of Financial Leverage, Again" by Martin Wolf

https://www.ft.com/content/098dcd60-8880-11ea-a01c-a28a3e3fbd33

*House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It from Happening Again* by Atif Mian and Amir Sufi

https://press.uchicago.edu/ucp/books/book/chicago/H/bo20832545.html

*Collateral Frameworks: The Open Secret of Central Banks* by Kjell Nyborg

https://www.cambridge.org/core/books/collateral-frameworks/DE8BACD87F364A66DD496F601BE92FE7

*Bankruptcy for Banks: A Sound Concept That Needs Fine-Tuning* by Mark Roe and David Skeel

https://www.nytimes.com/2016/08/17/business/dealbook/bankruptcy-for-banks-a-sound-concept-that-needs-fine-tuning.html

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

Kathryn Judge on the CARES Act and the Political Implications of Relief Efforts May 04, 2020

Show notes

Kathryn Judge is the Harvey J. Goldschmid Professor of Law at Columbia Law School, the editor of the Journal of Financial Regulation, and an expert on financial markets, financial regulation, and regulatory architecture. Kathryn joins Macro Musings to discuss the CARES Act, the Fed's role and its limitations regarding COVID-19 relief efforts, and the political implications of relief effort performance.

Transcript for the episode can be found here.

Kathryn's Twitter: @ProfKateJudge

Kathryn's Columbia profile: https://www.law.columbia.edu/faculty/kathryn-judge

Related Links:

Bonus segment with Kathryn:

https://youtu.be/iFub37lpq2c

*The Design Flaw at the Heart of the CARES Act* by Kathryn Judge

https://www.forbes.com/sites/kathrynjudge/2020/04/20/the-design-flaw-at-the-heart-of-the-cares-act/#21495f0e6bed

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

Jesus Fernandez-Villaverde on Central Bank Digital Currency and the Current Economic Responses to COVID-19 Apr 29, 2020

Show notes

Jesus Fernandez-Villaverde is a professor of economics at the University of Pennsylvania, a research associate with the National Bureau of Economic Research, a research affiliate with the Center for Economic Policy Research, and a returning guest to the podcast. Jesus specializes in macroeconomic modeling and economic history among other topics, and he joins Macro Musings to talk about COVID-19, central bank digital currency, and developments in the Eurozone. David and Jesus also discuss the history of central banks and the interacting public, how threatening inflation could become a useful tool for a central bank, and the value economic modeling could add to the epidemiological field.

Transcript for the episode can be found here.

Jesus's UPenn profile: https://www.sas.upenn.edu/~jesusfv/

Jesus's NBER archive: https://www.nber.org/people/jesus_fernandez-villaverde

Related Links:

Bonus segment with Jesus: https://youtu.be/CA6y9LqjDwQ

*Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities* by Jesus Fernandez-Villaverde & Charles Jones

https://web.stanford.edu/~chadj/sird-paper.pdf

*Central Bank Digital Currency: Central Banking For All?* by Jesus Fernandez-Villaverde, Daniel Sanches, Linda Schilling, & Harald Uhlig

https://bfi.uchicago.edu/working-paper/central-bank-digital-currency-central-banking-for-all/

*Central Bank Digital Currency in a Nominal World* by Jesus Fernandez-Villaverde, Daniel Sanches, Linda Schilling, & Harald Uhlig

https://www.sas.upenn.edu/~jesusfv/CBDC_Nominal.pdf

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

George Selgin on the Fed-Treasury Relationship, New Lending Facilities, and the Fed's Evolving Role in Response to COVID-19 Apr 27, 2020

Show notes

George Selgin is the Director of the Cato Institute Center for Monetary and Financial Alternatives and a returning guest to Macro Musings. He joins David to break down recent policy actions by the Federal Reserve and some of the resulting challenges, as they break down the Treasury's recent $454 billion backstop on Federal Reserve lending, the complex array of new Fed lending facilities in response to COVID-19, and the Fed's evolving role in the global economy.

The transcript for the episode can be found here.

George's Twitter: @GeorgeSelgin

George's Cato profile: https://www.cato.org/people/george-selgin

Related Links:

Bonus segment with George: https://youtu.be/Q73pWOeldf4

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

Mehrsa Baradaran on How COVID-19 is Exposing Existing Societal Wealth Gaps and Financial Access Challenges Apr 22, 2020

Show notes

Mehrsa Baradaran is a professor of law at the University of California Irvine and researches banking law, financial inclusion, inequality, and the racial wealth gap. Her scholarship includes the books, *How the Other Half Banks* and *The Color of Money: Black Banks and the Racial Wealth Gap.* Mehrsa joins Macro Musings to talk about the impact of COVID-19 and how existing wealth conditions and financial access challenges are exacerbating the crisis. David and Mehrsa also discuss the historical context for the racial wealth gap, why banking deserts are so consequential, and how a postal savings system may be a solution to the financial inclusion problem.

Transcripts for the episode can be found here.

Mehrsa's Twitter: @MehrsaBaradaran

Mehrsa's UCI profile: https://www.law.uci.edu/faculty/full-time/baradaran/

Related Links:

Link to bonus segment with Mehrsa: https://youtu.be/AcH3c89ZtKY

*How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy* by Mehrsa Baradaran

https://www.hup.harvard.edu/catalog.php?isbn=9780674983960

*The Color of Money: Black Banks and the Racial Wealth Gap* by Mehrsa Baradaran

https://www.hup.harvard.edu/catalog.php?isbn=9780674237476

*The U.S. Should Just Send Checks – But Won't* by Mehrsa Baradaran

https://www.theatlantic.com/ideas/archive/2020/04/the-us-should-just-write-checksbut-wont/609637/

*Rethinking Financial Inclusion: Designing an Equitable Financial System with Public Policy* by Mehrsa Baradaran