AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Macro Musings with David Beckworth
Marijn Bolhuis on Fiscal R-star and its Implications for Macroeconomic Policy
Jan 6, 2025
Marijn Bolhuis, an economist at the IMF, introduces the groundbreaking concept of fiscal R-star, reshaping our understanding of macroeconomic policy. He delves into the interplay between fiscal and monetary policies, particularly post-pandemic. Bolhuis explores consumer sentiment, revealing a gap between public perception and actual economic indicators, especially regarding inflation and borrowing costs. His insights highlight the nuanced dynamics that shape today’s economic environment and the challenges faced in maintaining fiscal discipline amidst changing political landscapes.
52:25
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The introduction of Fiscal R-Star highlights the importance of managing real interest rates to maintain a stable debt-to-GDP ratio for sustainable growth.
- Tensions between fiscal and monetary policies have escalated since the pandemic, creating a significant fiscal monetary gap that threatens macroeconomic stability.
Deep dives
The Concept of Fiscal R-Star
The discussion introduces the concept of Fiscal R-Star, highlighting its distinction from traditional R-Star measures used in monetary policy. Fiscal R-Star refers to the real interest rate that stabilizes a country's debt-to-GDP ratio when the economy is growing at potential and inflation is targeted. This concept posits that if the actual real interest rate exceeds this fiscal ceiling, government debt can become explosive, indicating potential financial instability. Understanding this dynamic is crucial for policymakers as it underscores the need for maintaining sustainable fiscal practices amid rising debt levels.
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode