Macro Musings with David Beckworth
Carola Binder on the History of Inflation, the Fed Framework Review, and the Promise of Nominal GDP Targeting
Aug 26, 2024
Carola Binder, an associate professor at the University of Texas at Austin and author of *Shock Values: Prices and Inflation in American Democracy*, joins the discussion on inflation's historical context. She delves into the implications of adopting nominal GDP targeting for monetary policy, emphasizing its potential to enhance stability. Carola also reflects on the Fed's upcoming framework review and shares insights from past economic struggles during the American Revolutionary and Civil Wars, revealing how these challenges have shaped contemporary monetary policy.
50:02
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Quick takeaways
- Carola Binder emphasizes the advantages of nominal GDP targeting, particularly its responsiveness to supply shocks, aiding economic stability amidst disruptions.
- Binder's book explores the historical evolution of inflation perceptions in American democracy, highlighting the political importance of price stability through various economic policies.
Deep dives
Karla Binder's New Role and Interdisciplinary Focus
Karla Binder recently joined the University of Texas at Austin as a founding faculty member in their new School of Civic Leadership. This initiative aims to enhance interdisciplinary studies by bringing together experts in economics, political science, and philosophy. The school plans to offer new majors and minors in Politics, Philosophy, and Economics (PPE) and Civic Honors, underscoring a commitment to civic engagement and education. Karla will teach courses related to her book, emphasizing inflation's effects in American democracy and the dynamics of capitalism.
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