The Capitalism and Freedom in the Twenty-First Century Podcast

In this discussion, David Beckworth, a Senior Research Fellow at the Mercatus Center, dives into the fascinating world of monetary policy. He shares insights from his career and compares Nominal GDP targeting with traditional inflation targeting. The conversation highlights how GDP targeting could stabilize economies better during downturns and the challenges of using accurate data for policy decisions. Additionally, they explore the Fed’s evolution in addressing inflation and how shifting to a floor system impacts global central banks.

Myron Scholes, a Nobel Laureate and co-originator of the Black-Scholes options pricing model, shares his remarkable journey from a mining town in Canada to the forefront of financial economics at the University of Chicago. He discusses the transformative impact of his model on options trading and investment banking, and the challenges faced during its development. Scholes also delves into the interplay between financial regulation and innovation, emphasizing the need for adaptability in an ever-evolving market landscape.

Brad Gerstner, Founder and CEO of Altimeter Capital, shares insights on his journey from Indiana to managing over $15 billion in tech investments. He discusses the role of free markets in economic growth, the challenges of navigating law and innovation, and the impact of the CHIPS Act on national security. Gerstner also proposes 'baby equities,' investment accounts for children to foster financial literacy and bridge wealth gaps, envisioning a brighter economic future for the next generation.

James Bullard, former president of the St. Louis Fed and dean at Purdue University, shares insights from his extensive career in monetary policy. He highlights key transformations in the Fed’s leadership under Bernanke and the importance of diverse economic perspectives. The conversation also covers the critical role of forward guidance during the Great Recession and recent inflation challenges. Bullard emphasizes the need for credible communication in monetary policy and discusses innovative approaches in business education that blend technology with traditional learning.

Jesus Fernández-Villaverde, a renowned Economics Professor at UPenn and director at Penn's Institute for the Study of Markets, dives into pressing economic themes with host Jon Hartley. They tackle the alarming decline in fertility rates and how this impacts global GDP growth, particularly in Japan. Fernández-Villaverde discusses the evolution of economic models, illustrating the differences between DSGE and VAR approaches. They also explore the complexities of macroeconomic theory, including the challenges of recessions and the critical role of institutions and economic education.

David Malpass, the former president of the World Bank and seasoned economist, shares insights on global finance and economic challenges. He discusses China's changing role in international lending, critiquing its opaque agreements impacting developing nations. The conversation highlights the effects of COVID-19 on vaccine distribution and sovereign debt relief. Malpass addresses inflation's impact on economic growth and climate policy while urging a reassessment of monetary strategies to tackle poverty and climate issues holistically.

Richard Clarida, former vice chairman of the Federal Reserve and a professor at Columbia University, shares his insights on pandemic monetary policy and inflation. He discusses the challenges of rising inflation and the Fed's shift to flexible average inflation targeting under his leadership. The conversation covers the importance of economic models like nowcasting, and the evolution of macroeconomic thought from Keynesian economics to more pragmatic approaches in today's complex landscape. Clarida reflects on lessons learned during critical economic moments, including the COVID-19 crisis.

Edward Glaeser, a Harvard economist and expert in urban economics, shares insights on land use reform and its potential to make housing more affordable. He reflects on his educational journey and the critical role of zoning laws in shaping housing markets. Glaeser discusses the complex relationship between institutions and human capital in economic growth, while also addressing urban crime trends and the necessity of policing reforms. The conversation concludes with thoughts on the future of cities as essential hubs in our rapidly changing world.

In this conversation, Steven Davis, a distinguished economist from the Hoover Institution, sheds light on his extensive research into job flows and his renowned book on job creation. He emphasizes the evolving definitions of full employment and critiques traditional views on job growth. The discussion turns to the significant impact of economic policy uncertainty on market dynamics. Finally, Davis explores the transformative effects of remote work on the labor market and its vulnerability to automation, all while considering future implications for the economy.

Bob Litterman, a pivotal figure in quantitative finance and former partner at Goldman Sachs, shares insights on the evolution of risk management and investing strategies. He discusses the carry trade liquidity crisis of 2024, drawing parallels with the 2007 quant crisis. Litterman advocates for the importance of carbon taxes and introduces his E-Z climate carbon pricing model to combat climate risks. The conversation delves into navigating market volatility and the significance of understanding crowded trades in quantitative investing.