Brookings Podcast on Economic Activity

Many indicators suggest that the U.S. economy is thriving, yet Americans continue to have a negative overall economic outlook. Stubbornly high inflation has played a significant role in this negative sentiment among consumers, even as wage growth has caught up with the rate of inflation. In a new study, “Why do we dislike inflation?” Stefanie Stantcheva fielded a survey to explore how Americans experience inflation and why they have such strong feelings about it. In this episode of the Brookings Podcast on Economic Activity, Stantcheva discusses her findings with Economic Studies Vice President and Director Ben Harris. Show notes and transcript The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to podcasts@brookings.edu.

Andrew Fieldhouse and David Munro discuss how US states have experienced similar economic recoveries in recent decades, despite historical variations. They explore reasons for this convergence, such as industrial composition and policy implications for federal macroeconomic stabilization. The conversation touches on migration patterns, labor market responses to economic shocks, and the impact of climate shocks on economies.

Economics professors Peter Blair Henry and Barry Eichengreen, along with Brookings Senior Fellow Gian Maria Milesi-Ferretti, discuss how Jamaica halved its debt in 10 years by running budget surpluses, ensuring political stability, and strong fiscal discipline. They highlight the role of consensus-building, stakeholder engagement, and unconventional debt reduction strategies, emphasizing the importance of leadership and historical context in sustaining economic policies.

The podcast discusses the challenges of decoupling the US-Chinese supply chains and the complexity of global supply chains during COVID-19. It introduces the concept of hidden exposure and proposes measurement methods to capture direct and indirect exposures. The dominance of China as a supplier in the US supply chain and the shift in perception of supply chains from positive to risky are explored. The distinction between idiosyncratic and systemic shocks in supply chains is discussed, along with strategies for achieving robustness and resilience in supply chain management. The risks and gains associated with being highly exposed to supply chains are also explored.

On this episode, Martin Neil Baily of Brookings speaks with Guido Lorenzoni, economist and co-author of a paper on wage-price spirals. They discuss how rising wages and prices can affect each other and drive inflation. The study suggests that wages can increase faster than inflation, at least for a time, without spinning the economy out of control. The podcast explores the interplay between wages and prices, scenarios of inflation and wage growth, optimal policy in managing overheated economy, and the response to supply shocks and sectoral shifts.

The podcast explores the surprising surge in new business formations and expansions during the pandemic. It discusses the potential long-term impact on business dynamics, employment growth, and city center activity. The speakers delve into the concept of business dynamism and its slowdown in recent years. They also examine the link between business formation and the job market, emphasizing the positive outcomes and opportunities for individuals. Additionally, the significance of young businesses and startups in the economy is highlighted, emphasizing the need for policies that support their entry and growth.

Fed interest rate hikes historically triggered crises in emerging markets, but not this time. Study explores improved monetary policy credibility in these countries. Discussion on the concept of capital leaving emerging markets and its consequences. Impact of improved credibility of central banks in major emerging markets and a new index to measure policy credibility. Potential consequences of rate hikes on emerging markets and poorer countries, emphasizing the importance of improving monetary policy credibility. Implications for countries planning to connect with global financial markets, emphasizing the need for improved policy frameworks and vulnerability management.

The podcast discusses Germany's response to the Russian gas embargo after the invasion of Ukraine, highlighting the country's dependency on Russian gas and the economic effects. It explores the role of patriotism and solidarity, the macro output reduction due to lack of substitution possibilities, and compares the gas debate to the price cap on Russian oil. The chapter also emphasizes the importance of understanding market circumstances and the limitations of models in analyzing big shocks.

Anne Case and Angus Deaton discuss their research on declining life expectancy for adults without a BA. They explore the increasing disparity in life expectancy, rise in deaths of despair, and impact of the COVID-19 pandemic. They also analyze the relationship between declining life expectancy and its effects on the labor market, emphasizing the need for alternative pathways to employment.

Out-going and incoming coeditors of the Brookings Papers on Economic Activity discuss the importance of BPEA in shaping economic policy, evaluating changing viewpoints, avoiding 'end of history' thinking, the significance of the Inflation Reduction Act, and creating an informed dialogue between academics and policymakers.