Macro Musings with David Beckworth

Jim Bianco, of Bianco Research, joins Macro Musings to discuss the latest on the economic impact from the coronavirus. David and Jim discuss the details and implications of the $2 Trillion Relief bill, the possibility of higher inflation, renewed threats to Fed independence, and implications for the Eurozone.   Transcript for the episode can be found here.   Jim’s Twitter: @biancoresearch Jim’s Bloomberg archive: https://www.bloomberg.com/opinion/authors/ABvwE0aTOvg/jim-bianco   Related Links: *The Fed's Cure Risks Being Worse Than the Disease* by Jim Bianco https://www.bloomberg.com/opinion/articles/2020-03-27/federal-reserve-s-financial-cure-risks-being-worse-than-disease   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Robin Brooks is a chief economist at the Institute of International Finance and has previously worked for Goldman Sachs and the IMF. Robin joins Macro Musings to talk about the global economic implications of the novel coronavirus. David and Robin also discuss what is happening to output gap measures, where the global dollar cycle stands today, and the importance of dollar swap lines for emerging markets.   Transcript for the episode can be found here.   Robin’s Twitter: @RobinBrooksIIF Robin’s IIF profile: https://www.iif.com/About-Us/Our-Leadership   Related Links:   *Federal Reserve Announces Extensive New Measures to Support the Economy* https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Stan Veuger is a resident scholar at the American Enterprise Institute where he specializes in political economy and public finance. Stan joins us today to discuss his co-authored proposal to save American businesses and American jobs as well as his thoughts on how Europe is handling the crisis. Specifically, David and Stan discuss the Federal Reserve’s ability to support targeted business loans, how the crisis has been panning out in Europe, and the timeline to global recovery.   Transcript for the episode can be found here.   Stan’s Twitter: @stanveuger Stan’s AEI profile: https://www.aei.org/profile/stan-veuger/   Related Links:   *How to Help American Businesses Endure and Jobs Survive* by Stan Veuger and Steven Hamilton https://www.aei.org/economics/how-to-help-american-businesses-endure-and-jobs-survive/   *Throwing a COVID-19 Liquidity Life-Line* by Markus Brunnermeier, Jean-Pierre Landau, Marco Pagano, and Ricardo Reis https://scholar.princeton.edu/sites/default/files/markus/files/covid_liquiditylifeline.pdf   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Claudia Sahm is the Director of Macroeconomic Policy at the Washington Center for Equitable Growth and formerly was a section chief at the Board of Governors of the Federal Reserve System. Claudia specializes in macroeconomics and household finance, and joins the show today to talk about what the Fed has recently done and what fiscal policy can do in response to the economic meltdown caused by COVID-19. Specifically, David and Claudia discuss sending out direct payments to individuals, what the Fed’s remaining toolkit may look like, and how the freshly minted Sahm Rule may be of paramount importance as this crisis continues to develop.    Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Claudia’s Twitter: @Claudia_Sahm Claudia’s Equitable Growth profile: https://equitablegrowth.org/people/claudia-sahm/   Related Links:   *The Case for a Big Coronavirus Stimulus* by Jason Furman  https://www.wsj.com/articles/the-case-for-a-big-coronavirus-stimulus-11583448500?mod=rsswn   *Go Big Or Go Home* by Tim Duy https://blogs.uoregon.edu/timduyfedwatch/2020/03/16/go-big-or-go-home/   *COVID-19 Pandemic, Direct Cash Transfers, and the Federal Reserve* by David Beckworth https://www.mercatus.org/publications/monetary-policy/covid-19-pandemic-direct-cash-transfers-and-federal-reserve   David’s Twitter: @DavidBeckworth David’s Blog: http://macromarketmusings.blogspot.com/

James Sweeney is the chief economist at Credit Suisse and joins us today as a part of our ongoing special coverage to talk about the coronavirus or COVID-19 and its implications for the economy. Specifically, David and James discuss what this pandemic means for the plumbing of the financial system, interest rates, and the type of recession we might experience.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   James’s Credit Suisse profile: https://www.credit-suisse.com/microsites/conferences/aic/en/speakers/cs-experts/james-sweeney.html   Related Links:   *Global Money Notes #27: Covid-19 and Global Dollar Funding* by Zoltan Pozsar and James Sweeney https://plus.credit-suisse.com/rpc4/ravDocView?docid=V7k0P32AC-WEqAJ7   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Megan Greene is a senior fellow at Harvard University’s Kennedy School and a senior fellow in international economics at Chatham House. Formerly, Megan was a chief economist on Wall Street and she currently has a bi-weekly column in the Financial Times on global macroeconomics. She joins the show today to talk about the coronavirus and the appropriate policy response to it as well as the future countercyclical macro policy in the United States. David and Megan also discuss the Fed’s future framework, arguments against the recent 50 basis point rate cut, and why the Fed should consider following the ECB’s lead on TLTROs as well as negative interest rates.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Megan’s Twitter: @economistmeg Megan’s website: https://economistmeg.com/about/   Related Links:   *Coronavirus May Be Worse Than Wall Street Is Wagering* by Megan Greene https://www.ft.com/content/44c9391c-5489-11ea-a1ef-da1721a0541e   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Ben Moll is a professor of economics at the London School of Economics, and is well known for his work on income and wealth distribution in macroeconomics and its implications for policy. Ben joins the show today to talk about this work and provide a look into the growing field of heterogeneous agent models. David and Ben also discuss the history of macro thought, the implications of different transmission mechanisms of monetary policy, and what HANK models mean for forward guidance and other more general makeup policies.   The transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Ben’s Twitter: @ben_moll Ben’s LSE website: https://benjaminmoll.com/   Related Links:   *Monetary Policy According to HANK* by Greg Kaplan, Ben Moll, and Giovanni Violante https://www.princeton.edu/~moll/HANK.pdf   *Household Balance Sheet Channels of Monetary Policy: A Back of the Envelope Calculation for the Euro Area* by Jiri Slacalek, Oreste Tristani, and Giovanni Violante https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14245   *Heterogeneous Agents Macroeconomics Has a Long History, and it Raises Many Questions* by Beatrice Cherrier https://beatricecherrier.wordpress.com/2018/11/28/heterogeneous-agent-macroeconomics-has-a-long-history-and-it-raises-many-questions/   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University, and a returning guest to Macro Musings. Scott joins the show today to talk about the recent market turmoil caused by the COVID-19 coronavirus and its implications for monetary policy.  David and Scott also discuss how the Fed should respond to a possible pandemic, why monetary policy is preferable to fiscal policy during a crisis, and how to approach the central bank credibility problem.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Scott’s blog: https://www.themoneyillusion.com/ Scott’s Mercatus profile: https://www.mercatus.org/scholars/scott-sumner   Related Links:   *It’s Time for the Fed to Take On the Coronavirus Threat* by David Beckworth https://www.nationalreview.com/2020/02/its-time-for-the-fed-to-take-on-the-coronavirus-threat/   *The Era of Fed Power is Over. Prepare for a More Perilous Road Ahead.* by Greg Ip https://www.wsj.com/articles/shrinking-influence-of-central-banks-ends-decades-of-business-as-usual-11579103829?mod=rsswn   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Paul Schmelzing is an economic historian, a visiting scholar at the Bank of England and a postdoc at the Yale University School of Management. Paul has written an influential new paper on the long history of interest rates titled, "Eight centuries of global real interest rates, R-G, and the ‘suprasecular’ decline, 1311–2018." Specifically, Paul and David discuss the implications of this paper’s findings for secular stagnation theory, Thomas Piketty’s inegalitarian wealth spiral, and for macroeconomic policy more generally.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Paul’s Twitter: @paul_schmelzing Paul’s Harvard profile: https://scholar.harvard.edu/pfschmelzing/bio   Related Links:   * Eight Centuries of Global Real Interest Rates, R-G, and the ‘Suprasecular’ Decline, 1311–2018* by Paul Schmelzing https://www.bankofengland.co.uk/working-paper/2020/eight-centuries-of-global-real-interest-rates-r-g-and-the-suprasecular-decline-1311-2018   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Ernie Tedeschi is a policy economist and the head of fiscal analysis at Evercore ISI, a macro advisory firm. He is also an occasional contributor to The Upshot section at The New York Times. Previously, Ernie was a senior advisor and an economist at the US Department of Treasury. His research interests include the federal budget, monetary policy, and labor markets. Ernie joins the show to talk about output gaps, full employment, labor markets, and the state of the economy. Specifically, Ernie and David discuss Ernie’s recent articles titled *Participation in the Hot Labor Market* and *Pay is Rising Fastest for Low Earners, One Reason? Minimum Wages.*   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/monetary-policy   Ernie’s Twitter: @ernietedeschi Ernie’s blog: https://medium.com/bonothesauro   Related Links:   *Participation and the Hot Labor Market* by Ernie Tedeschi https://medium.com/@employamerica/participation-and-the-hot-labor-market-a84ef77a3bb1   *Pay is Rising Fastest for Low Earners. One Reason? Minimum Wages.* by Ernie Tedeschi https://www.nytimes.com/2020/01/03/upshot/minimum-wage-boost-bottom-earners.html   *Labor Force Participation: Recent Developments and Future Prospects* by Stephanie Aaronson, Tomaz Cajner, Bruce Fallick, Felix Galbis-Reig, Christopher L. Smith, and William Wascher https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495029   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth