Macro Musings with David Beckworth

Morgan Ricks is a law professor at Vanderbilt University and an expert on financial regulation. From 2009-2010, he was a senior policy adviser at the U.S. Treasury Department where he focused on financial stability initiatives. Morgan joins the show to discuss his new book, “The Money Problem: Rethinking Financial Regulation,” which argues that shadow banking institutions create large sums of private sector money through issuing short-term debt. This rapid expansion creates instability to the financial system and to the broader economy. To solve this problem, Morgan proposes that only properly chartered, FDIC-insured banks be allowed to issue short-term liabilities. Although there may be more bureaucracy in insuring the financial system under this proposal, Morgan argues there would be less need for higher capital requirements and other regulations. David’s blog: http://macromarketmusings.blogspot.com/ Morgan Ricks’ Vanderbilt profile: http://law.vanderbilt.edu/bio/morgan-ricks David’s Twitter: @DavidBeckworth Morgan Ricks’ Twitter: @MorganRicks1 Related links: The Money Problem: Rethinking Financial Regulation https://www.amazon.com/Money-Problem-Rethinking-Financial-Regulation/dp/022633032X David’s review of The Money Problem in National Review (gated) https://www.nationalreview.com/magazine/2016-09-12-0100/morgan-ricks-the-money-problem “A Simpler Approach to Financial Reform” by Morgan Ricks http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2316900 “A Former Treasury Adviser on How to Really Fix Wall Street” by Morgan Ricks in The New Republic https://newrepublic.com/article/98659/wall-street-term-out-panic

26 Sep 201658min

Ryan Avent is an economics columnist for The Economist and author of the new book, The Wealth of Humans: Work, Power, and Status in the Twenty-First Century. He joins the show to discuss his new book, which explores how the Digital Revolution is dramatically changing the economy and our lives. He also discusses how he previously worked at the Bureau of Labor Statistics and as a private sector consultant before moving to journalism. Finally, David and Ryan talk about economic angst both in the United States and abroad as well as some sound macroeconomic policies to address this. David’s Twitter: @davidbeckworth David’s blog: http://macromarketmusings.blogspot.com/ Ryan Avent’s Twitter: @ryanavent Ryan Avent’s website: http://www.ryanavent.com/blog/?page_id=6 Related links: http://www.economist.com/ https://www.amazon.com/Wealth-Humans-Status-Twenty-first-Century/dp/1250075807

19 Sep 20161h 2min

Michael D. Bordo is a professor of economics and the director of the Center for Monetary and Financial History at Rutgers University, a Distinguished Visiting Fellow at the Hoover Institution, and a research associate at the National Bureau of Economic Research. He has also been a visiting scholar at numerous central banks across the world. Michael, a prolific scholar, joins the show to discuss a long career in monetary economics, including his research with the legendary Anna Schwartz. He shares his thoughts on the Great Recession and how it compares with the Great Depression. Additionally, he challenges the notion that financial crises like the 2007-2009 crisis are necessarily followed by slow recoveries. David and Michael also chat about the history of American banking law and how restrictions on interstate-branch banking until the 1990s hindered economic growth. Finally, Michael gives some advice about how to be a successful monetary historian! David’s blog: macromarketmusings.blogspot.com Michael Bordo’s homepage: https://sites.google.com/site/michaelbordo/ David’s Twitter: @davidbeckworth Related links: Michael Bordo in The Wall Street Journal: “Financial Recessions Don’t Lead to Weak Recessions” http://www.wsj.com/articles/SB10000872396390444506004577613122591922992 “A Lesson from the Great Depression that the Fed Might have Learned: A Comparison of the 1932 Open Market Purchases with Quantitative Easing” http://www.frbsf.org/economic-research/files/S01_P1_Arunima-Sinha.pdf “A Fiscal Union for the Euro: Some Lessons from History” http://www.nber.org/papers/w17380 “Under What Circumstances can Inflation be a Solution to Excessive National Debt: Some Lessons from History” http://docplayer.net/6583440-Under-what-circumstances-can-inflation-be-a-solution-to-excessive-national-debt-some-lessons-from-history.html

12 Sep 20161h 2min

Peter Ireland is the Murray and Monti Professor of Economics at Boston College, a research associate at the National Bureau of Economic Research, and a member of the Shadow Open Market Committee. He joins the show to discuss his experience as a student at the University of Chicago as well as the nuts and bolts of how the Federal Reserve sets out to achieve its short-, medium-, and long-term objectives. David and Peter also discuss the role of monetary aggregates in monetary policy. Economists largely don’t pay much attention to the traditional simple-sum measures of the money supply anymore, but Ireland argues that more complex measures of money, called Divisia indices, can teach us a lot about the stance of monetary policy. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.] http://mercatus.org/content/register-monetary-rules-post-crisis-world David’s blog: macromarketmusings.blogspot.com/ Peter Ireland’s personal website: https://www2.bc.edu/peter-ireland/ Peter Ireland’s Boston college profile: http://www.bc.edu/schools/cas/economics/faculty-and-staff/faculty-listing/peter-ireland.html David’s Twitter: @davidbeckworth Peter Ireland’s Twitter: @PIrelandatBC Related links: The Shadow Open Market Committee http://shadowfed.org/ A “Working” Solution to the Question of Nominal GDP Targeting by Peter Ireland and Michael Belongia https://dlib.bc.edu/islandora/object/bc-ir:103357/datastream/PDF/view

5 Sep 20161h 1min

Hugh Rockoff is a professor of economics at Rutgers University and has done extensive work in U.S. monetary history. He joins the show to discuss the criteria for an ideal monetary union and argues that the U.S. didn’t really become an optimal currency area until the 1930s. David and Hugh then discuss whether a present-day example, the Eurozone, fits these criteria. They also talk about interesting chapters in U.S. monetary history, including the Civil War, the Free Banking Era, and the bimetallism debate of the late 1800s. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.] http://mercatus.org/monetaryconference?utm_source=MacroMusingsPodcast&utm_medium=link&utm_campaign=MonetaryRules David’s blog: http://macromarketmusings.blogspot.com/ Hugh Rockoff’s homepage: http://econweb.rutgers.edu/rockoff/ David’s Twitter: @davidbeckworth Related links History of the American Economy by Hugh Rockoff and Gary M. Walton https://www.amazon.com/History-American-Economy-Economics-Titles/dp/1111822921 “How Long Did It Take the United States to Become an Optimal Currency Area?” (National Bureau of Economic Research) http://www.nber.org/papers/h0124 “The Wizard of Oz as a Monetary Allegory” (The Journal of Political Economy) https://www.unc.edu/~salemi/Econ006/Rockoff.pdf The Free Banking Era: A Re-Examination (Dissertations in American Economic History) https://www.amazon.com/Free-Banking-Era-Re-Examination-Dissertations/dp/0405072155

29 Aug 20161h

Douglas Irwin, professor of economics at Dartmouth College and author of Free Trade Under Fire (Princeton University Press, 2015), joins the show to discuss the economic arguments for free trade and the reasons for the heated politics surrounding trade. He describes the history of U.S. trade policy from the Embargo Act of 1808 to the Smoot-Hawley Tariff of 1930 to the North American Free Trade Agreement (NAFTA). Finally, he and David discuss the role of the inter-war gold standard during the Great Depression. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.] http://mercatus.org/monetaryconference?utm_source=MacroMusingsPodcast&utm_medium=link&utm_campaign=MonetaryRules David’s blog: http://macromarketmusings.blogspot.com/ Douglas Irwin’s homepage: https://www.dartmouth.edu/~dirwin/ David’s Twitter: @davidbeckworth Douglas Irwin’s Twitter: @D_A_Irwin Related links: “The Truth About Trade: What Critics Get Wrong About the Global Economy” (Foreign Affairs) https://www.foreignaffairs.com/articles/2016-06-13/truth-about-trade Free Trade Under Fire (Princeton University Press, fourth edition 2015) https://www.amazon.com/Free-Trade-under-Fire-Fourth/dp/0691166250 “The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo,” 1807-09. Review of International Economics. http://www.dartmouth.edu/~dirwin/docs/Embargo.pdf “Did France Cause the Great Depression?” (NBER Working Paper) http://www.nber.org/papers/w16350

22 Aug 201657min

Nick Rowe is a professor of economics at Carleton University in Ottawa, a member of the CD Howe Institute’s Monetary Policy Council and of Carlton University’s Centre for Monetary and Financial Economics, and a popular blogger at "Worthwhile Canadian Initiative." He developed an interest in macroeconomics as he came of age in the United Kingdom during the high inflation period from the late 1960s to 1970s. Nick joins the show to discuss some of the basics of monetary economics and argues that money is the critical factor that distinguishes macroeconomics from microeconomics. He also shares his thoughts on helicopter money, which he thinks is “small beer” or not as big a deal as commentators make it out to be. Finally, David and Nick also discuss some helpful analogies Nick has used to illustrate economic concepts including “Milton Friedman’s thermostat” – how a good thermostat works like a good central bank! David’s blog: http://macromarketmusings.blogspot.com/ Nick Rowe’s blog: http://worthwhile.typepad.com/ David’s Twitter: @DavdBeckworth Nick Rowe’s Twitter: @MacRoweNick Related links Centre for Monetary and Financial Economics (homepage) http://carleton.ca/economics/research/cmfe/ “What Makes a Central Bank? Asymmetric Redeemability and the Will to Act as One.” http://worthwhile.typepad.com/worthwhile_canadian_initi/2009/10/what-makes-a-bank-a-central-bank.html “Helicopter Money is Small Beer, and Normal” http://worthwhile.typepad.com/worthwhile_canadian_initi/2016/05/helicopter-money-is-small-beer.html “Is Money a Liability?” http://worthwhile.typepad.com/worthwhile_canadian_initi/2012/03/is-modern-central-bank-money-a-liability.html “Milton Friedman’s Thermostat” http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/12/milton-friedmans-thermostat.html

15 Aug 201659min

Jason Taylor, professor of economics at Central Michigan University and editor-in-chief of "Essays in Economic & Business History," is an expert in U.S. economic history, particularly during the Great Depression and World War II. He joins the show to discuss the causes of the Great Depression and the policy responses under Herbert Hoover and Franklin D. Roosevelt. David and Jason look at policies ranging from the international gold standard to the National Industrial Recovery Act. They also explore the possibility that large public spending during the New Deal and World War II may have facilitated a “Big Push” that helped modernize the American South. Finally, Jason and David also examine parallels between the Great Depression and the Great Recession. David’s blog: http://macromarketmusings.blogspot.com/ David’s Twitter: @davidbeckworth Jason’s webpage: https://sites.google.com/site/taylo2je/ Jason's article, "Did New Deal and World War II Public Capital Investments Facilitate a "Big Push" in the American South? https://www.jstor.org/stable/40752762?seq=1#page_scan_tab_contents

8 Aug 201658min