Macro Musings with David Beckworth

George Selgin is a senior fellow and director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute and is also a long-time returning guest of Macro Musings. In this bonus segment from the previous conversation, George rejoins the podcast to talk about the Fed's near-term plans to shrink its balance sheet, the impact of the standing repo facility on demand for reserves, the potential benefits of returning to a corridor operating system, and more. Check out Ideas of India: https://www.discoursemagazine.com/tag/ideas-of-india-podcast/ Subscribe to Ideas of India on your favorite podcast app. Transcript for the episode can be found here. George's Twitter: @GeorgeSelgin George's Cato Institute profile: https://www.cato.org/people/george-selgin Related Links: *Floored!* by George Selgin https://www.cato.org/working-paper/floored *The Menace of Fiscal QE* by George Selgin https://www.cato.org/books/menace-fiscal-qe *Churning at the Fed* by Milton Friedman https://miltonfriedman.hoover.org/internal/media/dispatcher/214260/full David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

George Selgin, a senior fellow at the Cato Institute with expertise in monetary economics, discusses central bank digital currencies (CBDCs) and stablecoins. He highlights the potential risks of CBDCs creating financial instability and the challenges of integrating retail digital accounts. Selgin also explores the transformative role of Federal Reserve accounts in banking, advocating for a balanced approach to foster innovation while ensuring systemic stability. He delves into wholesale CBDCs, their interaction with private stablecoins, and the evolving regulatory landscape.

Henry Curr is the economics editor for the Economist Magazine and a returning guest to the show. Henry has a new working paper out titled, "Money Printers Go Grrrr: Three Myths and Three Uncomfortable Truths about Quantitative Easing." Henry joins Macro Musings to discuss these three myths and uncomfortable truths about QE. Specifically, David and Henry discuss the continued relevance of quantitative easing as a policy tool, QE's relationship to financial markets and its effect on the banking sector, whether we can estimate the magnitude of its effect on interest rates, whether QE necessarily boosts the monetary base, and much more. Check out Ideas of India, another Mercatus original podcast: https://www.discoursemagazine.com/tag/ideas-of-india-podcast/ Transcript for the episode can be found here. Henry's Twitter: @Henry_Curr Henry's Economist profile: https://mediadirectory.economist.com/people/henry-curr/ Henry's website: http://www.henrycurr.com/ Related Links: *Money Printers Go Grr: Three Myths and Three Uncomfortable Truths about Quantitative Easing* by Henry Curr https://spe.org.uk/reading-room/ryb-essays/2020-21-rybczynski-prize-essay/ *Fifty Shades of QE: Comparing Findings of Central Bankers and Academics* by Brian Fabo, Martina Jančoková, Elisabeth Kempf and Ľuboš Pástor https://www.nber.org/papers/w27849 David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

Lorie Logan is an executive vice president in the Markets Group of the Federal Reserve Bank of New York. In that role, she's the manager of the System Open Market Account (SOMA), for the Federal Open Market Committee (FOMC), and she is also the head of the market operations, monitoring, and analysis. Lorie joins Macro Musings to talk about the operations side of monetary policy and her work at the New York Fed. Specifically, David and Lorie discuss the "dash for cash" during the March 2020 Treasury market crisis, the Fed's new standing repo facility, the future of the central bank's balance sheet, and more. Transcript for the episode can be found here. Lorie's New York Fed profile: https://www.newyorkfed.org/aboutthefed/orgchart/logan Lorie's Fed in Print archive: https://fedinprint.org/search?facets[]=authors_literal_array:Logan%2C+Lorie Related Links: *Monetary Policy Implementation: Adapting to a New Environment* by Lorie Logan https://www.newyorkfed.org/newsevents/speeches/2021/log211014 *Liquidity Shocks: Lessons Learned from the Global Financial Crisis and the Pandemic* by Lorie Logan https://www.newyorkfed.org/newsevents/speeches/2021/log210811 *Recent Disruptions and Potential Reforms in the U.S. Treasury Market: A Staff Progress Report* by the Inter-Agency Working Group https://home.treasury.gov/system/files/136/IAWG-Treasury-Report.pdf *U.S. Treasury Markets: Steps Toward Increased Resilience* by the G30 Working Group on Treasury Market Liquidity https://group30.org/publications/detail/4950 *Report of the Task Force on Financial Stability* by Glenn Hubbard et al. https://www.brookings.edu/research/report-of-the-task-force-on-financial-stability/ David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

Paul Krugman is a Nobel Laureate in economics, a columnist at The New York Times, and a Distinguished Professor of Economics at the Graduate Center of the City University of New York. He rejoins David on Macro Musings to discuss the great inflation surge of 2021 and its implications for policy. Specifically, David and Paul discuss the state of public opinion surrounding inflation, whether the level of aggregate demand or its composition is the more important driver, what the state of the economy would be if the Fed had more aggressively countered inflation, whether the Fed squeeze is the appropriate response, and much more. Transcript for the episode can be found here. Paul's Twitter: @paulkrugman Paul's NYT profile: https://www.nytimes.com/column/paul-krugman Related Links: *The Year of Inflation Infamy* by Paul Krugman https://www.nytimes.com/2021/12/16/opinion/inflation-economy-2021.html *It's Baaack: Japan's Slump and the Return of the Liquidity Trap* by Paul Krugman https://www.brookings.edu/wp-content/uploads/1998/06/1998b_bpea_krugman_dominquez_rogoff.pdf *The Princeton School and the Zero Lower Bound* by Scott Sumner https://www.mercatus.org/publications/monetary-policy/princeton-school-and-zero-lower-bound David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

In this special end-of-the-year episode of Macro Musings, David Beckworth joins guest host David Andolfatto of the St. Louis Fed to discuss a wide range of macroeconomic topics, including podcast highlights from the whole of 2021. More specifically, both Davids talk about the similarities and differences between average inflation targeting and NGDP targeting, the recent inflation puzzles that have plagued the macroeconomy, David's safe asset theory of inflation, and more. Want to support the show? Visit donate.mercatus.org/podcasts Transcript for the episode can be found here. David Beckworth's Twitter: @DavidBeckworth David Beckworth's blog: http://macromarketmusings.blogspot.com/ David Beckworth's Mercatus profile: https://www.mercatus.org/scholars/david-beckworth David Andolfatto's Twitter: @dandolfa David Andolfatto's St. Louis Fed profile: https://www.stlouisfed.org/about-us/leadership-governance/bank-officers/executive-bios/david-andolfatto Related Links: *The Safe Asset Shortage and the Low Inflation of 2010-2019: A Money Demand View* by David Beckworth https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3992846 *The Prospect of Fiscal Dominance in the United States: A New Quantity Theory Perspective* by David Beckworth https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3969473 *The Fiscal Theory of Price Level with a Bubble* by Markus Brunnermeier, Sebastian Merkel, and Yuliy Sannikov https://www.nber.org/papers/w27116

Talmon Smith is an economics reporter for The New York Times and joins David on Macro Musings to talk about the great inflation surge of 2021 and its implications for policy and politics. Specifically, David and Talmon discuss the potential drivers and implications of the great inflation surge that has taken place in 2021, the current and future state of supply chains, the impact of COVID-era stimulus, the state of the labor market, the political implications of the inflation surge, and much more. Want to support the show? Visit donate.mercatus.org/podcasts. Transcript for the episode can be found here. Talmon's Twitter: @talmonsmith Talmon's New York Times profile: https://www.nytimes.com/by/talmon-joseph-smith Related Links: *One-year jump in energy prices is a big factor in inflation's jump* by Talmon Smith https://www.nytimes.com/live/2021/12/10/business/inflation-cpi-stock-market-news#one-year-jump-in-energy-prices-is-a-big-factor-in-inflations-jump *Americans' Pandemic-Era 'Excess Savings' Are Dwindling for Many* by Talmon Smith https://www.nytimes.com/2021/12/07/business/pandemic-savings.html *President Biden's job approval sinking on inflation, crime and COVID: POLL* By Brittany Shepherd https://abcnews.go.com/Politics/president-bidens-job-approval-sinking-inflation-crime-covid/story?id=81701113 David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

Yesha Yadav is a law professor and associate dean at the Vanderbilt University Law School, where she works on banking and financial regulation, securities regulation, and the law of money and payment system. Yesha has written a recent paper titled, *The Failed Regulation of US Treasury Markets*, and she joins Macro Musings to discuss it. Specifically, David and Yesha talk about the implications of the 2020 Treasury market collapse, the fragmented nature of the Treasury market's regulatory structure, solutions for reform, and more. Transcript for the episode can be found here. Yesha's Vanderbilt Law profile: https://law.vanderbilt.edu/bio/yesha-yadav Yesha's Google Scholar archive: https://scholar.google.com/citations?user=Dn5cmSQAAAAJ&hl=en Related Links: *The Failed Regulation of U.S. Treasury Markets* by Yesha Yadav https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3365829 *Fragile Financial Regulation* by Pradeep Yadav and Yesha Yadav https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3685404 David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

Carola Binder is an Associate Professor of Economics at Haverford College, and Christina Parajon Skinner is an assistant professor at the Wharton School at the University of Pennsylvania. Both are returning guests to Macro Musings and they rejoin the podcast to talk about populism at the Fed and its implications for policy. Specifically, they discuss rising technopopulism at the Fed, the effect of populist pressures on its legitimacy, the importance of balancing experimentation and intellectual freedom with managing risks of politicization at the Fed, as well as their thoughts on the recent bouts of inflation. Transcript for the episode can be found here. Carola's Twitter: @cconces Carola's blog: https://carolabinder.blogspot.com/ Carola's Haverford profile: https://carolabinder.sites.haverford.edu/ Christina's Twitter: @CParaSkinner Christina's Wharton profile: https://lgst.wharton.upenn.edu/profile/skinnerc/ Related Links: Cato Institute 39th Annual Monetary Conference: Panel 1: The Populist Challenge to Fed Independence https://www.cato.org/multimedia/events/39th-annual-monetary-conference-panel-1-populist-challenge-fed-independence *Technopopulism and Central Banks* by Carola Binder https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823456 *Technopopulism: The New Logic of Democratic Politics* by Christopher J. Bickerton and Carlo Invernizzi Accetti https://oxford.universitypressscholarship.com/view/10.1093/oso/9780198807766.001.0001/oso-9780198807766 *Central Bank Activism* by Christina Parajon Skinner https://www.newyorkfed.org/medialibrary/Microsites/fmlg/files/2021/Skinner_Central%20Bank%20Activism.pdf *Laboratories of Central Banking* by Carola Binder and Christina Parajon Skinner https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3956845 *Fifty Shades of QE: Comparing Findings of Central Bankers and Academics* by Brian Fabo, Martina Jančoková, Elisabeth Kempf, and Ľuboš Pástor https://www.nber.org/papers/w27849 David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/

Matthew Klein is the author of The Overshoot, a newsletter that helps readers make sense of the global economy. Matt is also a returning guest to the podcast, and rejoins Macro Musings to talk about the hot topic of inflation and its outlook. Specifically, David and Matt discuss what is driving trend inflation, Matt's decomposition of the CPI, whether or not we should be worried about inflationary trends, and more. Transcript for the episode can be found here. Matthew's Twitter: @M_C_Klein Matthew's Substack: https://theovershoot.co/about Related Links: *The Case for Patience on Inflation* by Matthew Klein https://theovershoot.co/p/the-case-for-patience-on-inflation *What's Going On With Interest Rates? (Part 1)* by Matthew Klein https://theovershoot.co/p/whats-going-on-with-interest-rates *Fed Policy Must Adjust for Inflation* by Martin Wolf https://www.ft.com/content/dc3bedc7-5694-4868-8b86-f9a215966f52 David's Twitter: @DavidBeckworth David's blog: http://macromarketmusings.blogspot.com/