Alp Simsek on a Risk-Centric View of Demand, Recession, and Speculation
Macro Musings with David Beckworth
00:00
Is This a Supply Shock?
It's almost impossible in the modern world To have a pure supply shock that doesn't spill over into the financial system and turn into a demand shock. So when you product the capacity of the economy declines Naturally asset prices Decline as well just through the supply side. And we find that this will naturally again through the bridge travel to the risk markets Create a big problem in risk markets A big repricing of risk can then travel back to the goods market and create potentially recession.
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