EconoFact Chats

This spring, Silicon Valley Bank and Signature Bank collapsed and First Republic Bank failed and was sold to J.P. Morgan Chase. The $532 billion in assets of these banks exceeded the inflation adjusted value of assets of the 25 banks that failed in 2008. Why did these banks fail? Are they the first three failures in what could be a string of bank collapses? Or did the action of regulators stem the crisis? What policies are needed to make banks more resilient? EconoFact Chats welcomes back Jeremy Stein to discuss these issues. Jeremy is a Professor of Economics at Harvard University. He was a member of the Board of Governors of the Federal Reserve from 2012 to 2014, and served as a senior advisor to the Treasury Secretary and on the staff of the National Economic Council during the global financial crisis.

The U.S. government could default on its debt obligations by June 1st if Congress doesn't raise or suspend the debt ceiling. This would have far-reaching consequences in the United States and around the world. Why does the U.S. even have a debt limit when virtually no other country does? How often has the debt ceiling been raised in the past? What are the options to avoid default if Congress does not raise the debt ceiling? And what would be the likely consequences of a default? To address these questions, EconoFact Chats welcomes back Bill Gale of the Brookings Institution. Bill is widely recognized as one of the country's top experts on public finance. He is the author of ‘Fiscal Therapy: Curing Americans' Debt Addiction and Investing in the Future.’

The maternal mortality rate in the U.S. is three to four times that of comparably wealthy countries. Furthermore, it is much higher for Black women than White women, and for poor women than for rich women. Strikingly, high income Black mothers have the same risk of dying in the first year following childbirth as the poorest white mothers. What accounts for high maternal mortality in the United States as compared to other rich countries, and for the racial and income differences within this country. What can policy do to ensure better outcomes? Petra Persson and Maya Rossin-Slater join EconoFact Chats to discuss these important questions.  Maya is a Professor in the Department of Health Policy at Stanford University. Petra is a Professor at Stanford's Department of Economics.

Economic policies affect people's lives, but the policies themselves can seem arcane. Writing about economics in an interesting, accessible, and compelling fashion contributes importantly to the public’s understanding. Catherine Rampell, an award winning columnist for the Washington Post, shares her thoughts on how to convey key insights on economic issues in this episode of EconoFact Chats. Catherine is an opinion columnist at The Washington Post. She also appears on CNN, and PBS News Hour. Notable awards recognizing her work include the Online Journalism Award for Commentary, and the Weidenbaum Center Award for Evidence-based Journalism.

2.3 billion people, or 30% of the world's population, are food insecure. This isn't just a problem in low-income countries – an estimated 34 million people in the United States, including one out of every eight children, have constrained diets because of a lack of access to food. Furthermore, malnutrition and obesity are common since most people’s diets have some deficiencies, or some excesses because of the costs of food, and a lack of knowledge about what constitutes healthy eating. What are the causes of hunger? What makes for a healthy diet, and what does it cost to provide this to a family, both in the United States, and around the world? Will Masters joins EconoFact Chats to discuss these and other questions. Will is a professor at the Friedman School of Nutrition at Tufts University. He is also an elected fellow of the Agricultural and Applied Economics Association.

While China's rapid economic growth has made it an attractive target for foreign investments, it is not straightforward to know how much of one's portfolio includes exposure to Chinese companies. As Matteo Maggiori notes, much of the increasing investment in China is through shell companies in offshore markets like the Cayman Islands. Matteo joins EconoFact Chats to discuss the economic, regulatory and fiscal implications of investments in tax havens, and of international investment more generally. Matteo is the Moghadam Family Professor of Finance at the Stanford Graduate School of Business. He is a director of the Global Allocation Project. He received the American Finance Association’s Fischer Black Prize in 2021.

In 2016, immigration to the U.S. began to fall, and after bottoming out at the outset of COVID-19, rebounded in 2021 and 2022. This rebound occurred at a time when labor force participation was at its lowest point in over four decades. Over a longer horizon, the aging of the U.S. population will lead to a decline in the native-born labor force. Could greater immigration help alleviate labor market shortages? Would immigrants take jobs from native-born Americans, and force down wages? To answer these and other questions, EconoFact Chats welcomes back Professor Giovanni Peri of the University of California at Davis. Giovanni is the founding director of the Global Migration Center at UC Davis.

Much of the demand for automation in richer countries - whether it be for self-checkout machines or driverless trucks - is driven by labor scarcity. And as populations in these countries age, this scarcity will become more acute.  Yet, as Lant Pritchett highlights in a recent Foreign Affairs article, globally, labor remains abundant. Rather than devoting vital high-level scientific and technological knowledge as well as entrepreneurship to address these shortages, a far more efficient solution is to simply allow greater immigration from labor-abundant countries, whose workers would welcome these employment opportunities. Lant discusses the broad economic arguments for, as well as the political and social concerns against, greater international labor mobility in this EconoFact Chats episode.  Lant is research director of the Labor Mobility Partnerships. He has worked at the World Bank and has taught at Harvard, Oxford, and the London School of Economics.

The collapse of Silicon Valley Bank and Signature Bank raised the specter of a broader financial and economic crisis. This seems to have been averted by the decision to ensure all deposits; but questions remain about banks’ risk-taking, the adequacy of regulation, and whether continuing interest rate hikes will further imperil the financial system. Moderating the rise in interest rates, however, counters the efforts to bring down inflation, which continues to be well above its target rate. Will the Federal Reserve recalibrate its efforts to tackling inflation? What do regulatory failures mean for future policies regarding banking supervision and oversight?  To discuss these issues Econofact Chats welcomes back Binyamin Applebaum of the New York Times, Scott Horsley of NPR, Greg Ip of the Wall Street Journal, and Heather Long of The Washington Post.

Inflation in the United States rose above 9 percent in the summer of 2022, its highest rate in over four decades. The Federal Reserve has aggressively raised interest rates to combat inflation. While the inflation rate is declining, it remains well above the target rate of 2%.  Did the Federal Reserve react too late to rising inflation? Were its subsequent policy moves appropriately restrictive? Will current policy lead to a recession, or can the Fed engineer a soft landing that brings down inflation without causing a recession? EconoFact Chats welcomes back Jeffrey Fuhrer to discuss these issues. Jeff is a Senior Fellow at the Mossavar-Rahmani Center for Business and Government at Harvard's Kennedy School. He worked for almost four decades in the Federal Reserve System, including serving as Research Director at the Federal Reserve Bank of Boston, and as Special Advisor to that Bank’s President.