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.

Sam Alburger, the producer of the show and guest host, reflects on a transformative year in macroeconomics and highlights memorable discussions with notable guests. They share personal anecdotes linking basketball and economics, revealing David Beckworth’s athletic background. The duo discusses the rise of AI in podcasting and the evolving role of central banks while celebrating the community built around the show. With humor and gratitude, they look back on impactful episodes and the insights gained throughout the year.

George Selgin, a senior fellow at the Cato Institute, dives into the controversial terrain of strategic Bitcoin reserves and their potential implications for U.S. monetary policy. He critiques government involvement in Bitcoin, exploring its evolving status as an alternative to traditional currencies. Selgin also addresses the rising issues of debanking, linking them to macroeconomic factors, and advocates for a reformed regulatory environment. Additionally, he discusses the Fed's framework review and the potential benefits of adopting nominal GDP targeting for more effective economic stability.

Joey Politano, an economist and commentator renowned for his Substack newsletter, joins to explore the AI investment boom and economic growth. He delves into the generational differences in economic views and how the experiences of Millennials and Gen Z shape their perspectives. The conversation shifts to AI's pivotal role in enhancing scientific research and energy demands, particularly highlighting the resurgence of nuclear energy as crucial for powering AI technologies. Politano also discusses how these trends could signify a departure from secular stagnation.

Jeffrey Lacker, a senior scholar at the Mercatus Center and former president of the Federal Reserve Bank of Richmond, dives into the evolution of the Fed's credit policy. He reflects on the Shadow Open Market Committee's role and insights from a recent conference. Lacker discusses the shifts in monetary policy frameworks, including inflation targeting changes. He explores the implications of helicopter drops for fiscal policy and the evolution of the Fed's role as a lender of last resort, especially during financial crises.

Zachary Mazlish, an economist from the University of Oxford, dives into the intricate ties between inflation, the 2024 presidential race, and the macroeconomic shift caused by transformative AI. He highlights how inflation has affected the financial standing of the median voter, critiques wage growth trends, and explores the dual-edged nature of AI’s impact on productivity and asset pricing. The discussion also touches on optimal monetary policy amidst rising productivity and the potential risks of job automation. A thought-provoking listen!

Ellen Correia Golay, an advisor at the Federal Reserve Bank of New York, dives into the complexities of the U.S. Treasury market. She shares her career insights and discusses the challenges of managing Treasury operations, especially during financial crises. Ellen highlights the significance of communication among policymakers and market participants. Key topics include new initiatives like the Treasury buyback program and transparency improvements through individual transaction reporting, aimed at enhancing market stability and efficiency.

Emil Verner, an associate professor at MIT Sloan and a research fellow at the National Bureau of Economic Research, dives into the intricate world of banking crises and credit booms. He discusses the historical patterns of bank failures and how solvency issues often precede crises, challenging the traditional narrative of panic-induced bank runs. Verner also links financial turmoil to the rise of populism, particularly in Hungary, showcasing how economic distress reshapes political landscapes. His insights highlight the vital need for robust regulatory frameworks to ensure financial stability.

Loretta Mester, President and CEO of the Federal Reserve Bank of Cleveland, discusses her extensive career in the Federal Reserve System. She delves into the impact of inflation on low-income households and the Fed's challenging balance between controlling it and promoting employment. Mester also explores the Flexible Average Inflation Target (FATE) and its implications for monetary policy, emphasizing the need for robust frameworks that adapt to evolving economic landscapes. Her insights provide a fascinating look into the complexities of modern monetary policy.

Jon Hartley, a macroeconomist with the Mercatus Center and host of *Capitalism and Freedom in the 21st Century*, discusses key insights from a recent Hoover Institution conference. He explores the Shadow Open Market Committee's role in shaping monetary policy, the tension between fiscal theories and Fed strategies, and the implications of government debt management. Hartley also dives into how changing fiscal-monetary dynamics affect economic stability and the relevance of historical policy decisions during inflationary periods.