84 - Nick Bloom on Economic Uncertainty and the Productivity Slowdown

Macro Musings is back with another bonus episode, as Sam Bell and Skanda Amarnath (Employ America) are joined by Julia Coronado (Macro Policy Perspectives) and David Beckworth (Macro Musings) to talk through the announcement of the Fed's framework transition towards average inflation targeting. Specifically, this panel of guests discuss the implications of moving to an average inflation targeting regime, whether the shift may cause credibility problems for the central bank, how to continue to improve the Fed's toolkit, and more. Special thanks to the Employ America team for allowing us to use their webcast audio for this special Macro Musings bonus content. Transcript for the episode can be found here. Employ America's Twitter: @employamerica Employ America's website: https://employamerica.org/ Sam Bell's Twitter: @sam_a_bell Skanda Amarnath's Twitter: @IrvingSwisher Julia's Twitter: @jc_econ Julia's Macro Policy Perspectives profile: https://www.macropolicyperspectives.com/team Related Links: *A New Way to Manage Inflation* by David Beckworth https://www.mercatus.org/bridge/commentary/new-way-manage-inflation *By Doubling Down On Inflation Targeting, the Fed Is At Risk of Forgetting Lessons from 2008 & 2011* by Skanda Amarnath https://medium.com/@skanda_97974/by-doubling-down-on-inflation-targeting-the-fed-is-at-risk-of-forgetting-lessons-from-2008-2011-f877f78acba2 *Securing Macroeconomic and Monetary Stability with a Federal Reserve–Backed Digital Currency* by Julia Coronado and Simon Potter https://www.piie.com/system/files/documents/pb20-4.pdf David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

2 Sep 202058min

Scott Lincicome is a senior fellow in Economic Studies at Cato Institute where he writes on international and domestic economic issues, including international trade, industrial policy and manufacturing and global supply chains. Scott joins David on Macro Musings to discuss what we've learned so far about the so-called China shock and where we are today in the trade war. Specifically, David and Scott discuss the historical rise of Chinese exports, its impact on US labor markets, how certain policies make it harder for US workers to adjust, and whether the Trump administration marks a genuine regime shift in international trade. Transcript for the episode can be found here. Scott's Twitter: @scottlincicome Scott's Cato Institute profile: https://www.cato.org/people/scott-lincicome Related Links: *Testing the 'China Shock': Was Normalizing Trade with China a Mistake?"*by Scott Lincicome https://www.cato.org/publications/policy-analysis/testing-china-shock-was-normalizing-trade-china-mistake#:~:text=However%2C%20champions%20of%20the%20emerging,with%20China%20for%20particular%20scorn.&text=It%20finds%20that%20PNTR%20and,that%20PNTR%20critics%20now%20repeat. *Clashing over Commerce* by Douglas Irwin https://press.uchicago.edu/ucp/books/book/chicago/C/bo24475328.html *Audaciously Hopeful: How President Obama Can Help Restore the Pro‐​Trade Consensus* by Dan Ikenson and Scott Lincicome https://www.cato.org/publications/trade-policy-analysis/audaciously-hopeful-how-president-obama-can-help-restore-protrade-consensus *The 'China Shock', Exports and U.S. Employment: A Global Input-Output Analysis* by Robert Feenstra and Akira Sasahara https://www.nber.org/papers/w24022 *Executive Incentives, Import Restrictions, and Competition* by Brian Blank https://www.mercatus.org/publications/trade-and-immigration/executive-incentives-import-restrictions-and-competition David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

31 Aug 20201h 1min

Jim Tankersley is a tax and economics reporter for the New York Times and has written a new book on the middle class titled, *The Riches of This Land: The Untold, True Story of the American Middle Class.* Jim joins Macro Musings to talk about this book, and the state of the middle class in the US. David and Jim also discuss the history and golden era of the middle class as well as the steps policymakers can take to ensure we return to a path of robust economic growth. Transcript for the episode can be found here. Jim's Twitter: @jimtankersley Jim's New York Times archive: https://www.nytimes.com/by/jim-tankersley Related Links: *The Riches of This Land: The Untold, True Story of the American Middle Class* by Jim Tankersley https://www.publicaffairsbooks.com/titles/jim-tankersley/the-riches-of-this-land/9781541767836/ *The Allocation of Talent and U.S. Economic Growth* by Chang-Tai Hsieh, Erik Hurst, Charles Jones, and Peter Klenow https://www.nber.org/papers/w18693 *Populism in Place: The Economic Geography of the Globalization Backlash* by J. Lawrence Broz, Jeffry Freiden, and Stephen Weymouth https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501263 *Testing the 'China Shock': Was Normalizing Trade with China a Mistake?* by Scott Lincicome https://www.cato.org/publications/policy-analysis/testing-china-shock-was-normalizing-trade-china-mistake *The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade* by David Autor, David Dorn, and Gordon Hanson https://economics.mit.edu/files/12751 *The Complacent Class: The Self-Defeating Quest for the American Dream* by Tyler Cowen https://us.macmillan.com/books/9781250108708 David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

24 Aug 20201h 4min

Vincent Grossmann-Wirth is the Deputy Head of Monetary Policy Implementation Division at the Banque de France. Vincent joins Macro Musings to discuss the European Central Bank's response to the COVID-19 crisis and what may lie ahead for the central bank. Specifically, Vincent and David discuss how the ECB's structure and operating system compares to the US Federal Reserve System, the various dimensions of the ECB's response to COVID-19, and what the ECB's review of its operating framework portends for the future of monetary policy. Transcript for the episode can be found here. Vincent's Twitter: @VinceGW Vincent's Banque de France profile: https://www.banque-france.fr/en/economics/economists-and-researchers/vincent-grossmann-wirth Related Links: *Monetary policy measures taken by the Eurosystem in response to COVID-19* by Vincent Grossmann-Wirth https://blocnotesdeleco.banque-france.fr/en/blog-entry/monetary-policy-measures-taken-eurosystem-response-covid-19 *What Monetary Policy Operational Frameworks in the New Financial Environment? A Comparison of the US Fed and the Eurosystem Perspectives, 2007–2019* by Vincent Grossmann-Wirth https://ideas.repec.org/a/mes/ijpoec/v48y2019i4p336-352.html David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

17 Aug 202059min

David Schleicher is a professor at Yale Law School, and as a returning guest to Macro Musings, he joins to talk about the historical role that the federal government has played in responding to state and local budget crises, including the municipal trllemma it faces. This trilemma says the federal government can only avoid two of the three following harms: (1) moral hazard for state budgets; (2) worsening recessions; (3) reducing future state and local infrastructure investment. Specifically, they discuss this trilemma as well as its implications for the COVID-19 crisis. Transcript for the episode can be found here. David's Twitter: @ProfSchleich David's Yale profile: https://law.yale.edu/david-n-schleicher Related Links: *Stuck! The Law and Economics of Residential Stagnation* by David Schleicher https://www.yalelawjournal.org/article/stuck-the-law-and-economics-of-residential-stagnation *Hands On! Part I: The Trilemma Facing the Federal Government During State and Local Budget Crises* by David Schleicher https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3649278 *David Schleicher on Local and State Regulation and Declining Mobility* by Macro Musings https://macromusings.libsyn.com/58-david-schleicher-on-local-and-state-regulation-and-declining-mobility *The Future of Remote Work* by Adam Ozimek https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3638597 *States Continue to Face Large Shortfalls Due to COVID-19 Effects* by Elizabeth McNichol and Michael Leachman https://www.cbpp.org/research/state-budget-and-tax/states-continue-to-face-large-shortfalls-due-to-covid-19-effects David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

10 Aug 20201h 4min

Jon Sindreu is a reporter for the Wall Street Journal where he covers financial markets and the global transportation industry for the Heard on the Street column. Jon joins David on Macro Musings to discuss the role of global financial flows in driving global trade patterns. Specifically, Jon and David discuss the Bernanke view, loanable funds view, and money view of global financial system, as well as the implications for policy. Transcript for the episode can be found here. Jon's Twitter: @jonsindreu Jon's Wall Street Journal profile: https://www.wsj.com/news/author/jon-sindreu?mod=rsswn Related Links: *Trade Wars Are Class Wars* by Matthew Klein and Michael Pettis https://yalebooks.yale.edu/book/9780300244175/trade-wars-are-class-wars *Wages of Destruction* by Adam Tooze https://www.penguinrandomhouse.com/books/295490/the-wages-of-destruction-by-adam-tooze/ *Capital Flows, Asset Prices, and the Real Economy: A "China Shock" in the U.S. Real Estate Market* by Zhimin Li, Leslie Sheng Shen, and Calvin Zhang https://www.federalreserve.gov/econres/ifdp/capital-flows-asset-prices-and-the-real-economy-a-china-shock-in-the-us-real-estate-market.htm David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

3 Aug 20201h 3min

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

27 Juli 202044min

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

20 Juli 202059min