Macro Musings

George Selgin, director of the Cato Institute’s Center for Monetary and Financial Alternatives, makes the case that central banks, rather than focusing on the price level or inflation rate, should instead allow inflation to reflect changes in productivity growth. According to this productivity norm, deflation can actually be a good thing if it reflects improved productivity. Selgin examines the Great Deflation of the late 1800s and dispels some of the popular myths surrounding that period. He also discusses what the Fed got wrong in the lead-up to the recent financial crisis. David’s blog: http://macromarketmusings.blogspot.com/ David’s Twitter: https://twitter.com/DavidBeckworth Georg Selgin’s Cato archive: http://www.cato.org/people/george-selgin George Selgin’s Twitter: https://twitter.com/georgeselgin Links from today’s show: http://www.iea.org.uk/sites/default/files/publications/files/upldbook98pdf.pdf https://www.minneapolisfed.org/research/sr/sr331.pdf http://voxeu.org/article/historical-look-deflation

National Review senior editor Ramesh Ponnuru discusses his adventure into monetary economics. He shares his thoughts on some of the current-day misconceptions surrounding Federal Reserve policy and makes the case for a more nuanced, yet rules-based approach toward monetary policy. *Note: The host and guest briefly mention 2016 presidential candidate Ted Cruz and Cruz's views on monetary policy. This episode was recorded before Cruz suspended his presidential campaign. David's blog: http://macromarketmusings.blogspot.com/ David's Twitter: https://twitter.com/DavidBeckworth Ramesh Ponnuru's NRO archive: http://www.nationalreview.com/author/ramesh-ponnuru Ramesh's Twitter: https://twitter.com/rameshponnuru Links from today's show: http://www.nytimes.com/2016/01/27/opinion/subprime-reasoning-on-housing.html https://www.nationalreview.com/nrd/articles/300951/monetary-regime-change https://www.nationalreview.com/nrd/articles/378042/right-goal-central-banks http://www.bloomberg.com/view/articles/2015-08-14/fallible-

Miles Kimball, professor of economics at the University of Michigan and blogger at “Confessions of a Supply-Side Liberal,” joins the show to discuss negative interest rates. Kimball explains how the natural rate of interest can go below zero and why central banks should act accordingly. He also makes the case for higher equity requirements for financial institutions. David's blog: macromarketmusings.blogspot.com Miles Kimball’s blog: http://blog.supplysideliberal.com/ David’s Twitter: https://twitter.com/DavidBeckworth Miles Kimball's Twitter: https://twitter.com/mileskimball Links from today’s show: http://blog.supplysideliberal.com/post/56311827170/the-medium-run-natural-interest-rate-and-the https://www.imf.org/external/pubs/ft/wp/2015/wp15224.pdf https://dl.dropboxusercontent.com/u/19721014/National%20Institute%20Economic%20Review-2015-Kimball-R5-R14.pdf http://bankersnewclothes.com/

Cardiff Garcia, the US editor of the Financial Times blog, Alphaville, discusses the world of economics journalism, the 2008 crisis, and current monetary policy, both in the United States and abroad. He also shares his thoughts on the demand for so-called “safe assets” in a time of crisis and the difficulties of inflation-targeting. David's blog: http://macromarketmusings.blogspot.com/ http://ftalphaville.ft.com/ David's Twitter: https://twitter.com/DavidBeckworth Cardiff's Twitter: https://twitter.com/CardiffGarcia

In this episode, John Cochrane, senior fellow at the Hoover Institution and blogger at The Grumpy Economist, discusses his journey into economics and finance with host David Beckworth. They also discuss the controversial fiscal theory of the price level, which argues that fiscal policy, not monetary policy set by central banks, primarily determines inflation. David’s blog: http://macromarketmusings.blogspot.com/ John Cochrane’s blog: http://johnhcochrane.blogspot.com/ John Cochrane’s Twitter: https://twitter.com/JohnHCochrane Links from today’s conversation: http://faculty.chicagobooth.edu/john.cochrane/research/papers/Campbell_Cochrane_By_Force_of_Habit_(JPE).pdf http://faculty.chicagobooth.edu/john.cochrane/research/papers/New_Structure.pdf http://isites.harvard.edu/fs/docs/icb.topic500592.files/sargent%20wallace.pdf

John Taylor of Stanford University and the Hoover Institution joins host David Beckworth to discuss Taylor's famous monetary rule for central banks in setting interest rates in response to changes in inflation and output. They discuss how Taylor discovered the rule and how it has performed over time. Taylor also shares his thoughts for improving current Federal Reserve policy. David's blog: http://macromarketmusings.blogspot.com John Taylor's blog: http://economicsone.com/ Links from today's conversation: http://web.stanford.edu/~johntayl/Papers/Discretion.PDF http://www.federalreserve.gov/newsevents/speech/yellen20120606a.htm http://www.hoover.org/sites/default/files/research/docs/jmcb_lecture.pdf http://www.hoover.org/press-releases/hoover-press-getting-track-how-government-actions-and-interventions-caused-prolonged https://huizenga.house.gov/uploadedfiles/3189.fed.reform.section.by.section.pdf

Welcome to Macro Musings, a new podcast exploring the important macroeconomic issues of the past, present, and future. In the inaugural episode, Scott Sumner joins host David Beckworth to talk about Scott's new book *The Midas Paradox*, which advances a bold new explanation of what caused the Great Depression. They also discuss Scott's path into macro and monetary economics as well as what the Fed got wrong in 2008. David's blog: http://macromarketmusings.blogspot.com Scott's blog: http://www.themoneyillusion.com/ Links from today's conversation: http://www.amazon.com/The-Midas-Paradox-Government-Depression/dp/1598131508 http://www.nytimes.com/2016/01/27/opinion/subprime-reasoning-on-housing.html?_r=0