Macro Musings

George Selgin is the director emeritus of the Cato Institute’s Center for Monetary and Financial Alternatives and is a returning guest to Macro Musings. George rejoins David on the podcast to discuss cryptocurrency, stable coins, CBDCs, and a push for a higher inflation target. Specifically, George and David discuss the category of ‘synthetic commodity money’ and how bitcoin is a potential example, the current state of Bitcoin amidst El Salvador’s transition to Bitcoin as its legal tender, the role of fintechs in the potential future of a Fed central bank digital currency, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   George’s Twitter: @GeorgeSelgin George’s Cato Institute profile: https://www.cato.org/people/george-selgin   Related Links:   *Synthetic Commodity Money* by George Selgin https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2000118   *The Denationalization of Money* by F.A. Hayek https://www.amazon.com/Denationalization-Money-

Peter Conti-Brown is a legal scholar and financial historian at the University of Pennsylvania and is a nonresident fellow in economic studies at the Brookings Institution. Peter’s scholarship focuses on the legal and historical issues of the Federal Reserve system, and he rejoins Macro Musings to talk about the many facets of Fed governance. David and Peter specifically discuss the Federal Reserve’s recent trading scandal, the Fed Chair nomination process, the central bank’s role in fighting climate change, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Peter’s Twitter: @PeterContiBrown Peter’s Brookings profile: https://www.brookings.edu/author/peter-conti-brown/ Peter’s Wharton profile: https://lgst.wharton.upenn.edu/profile/petercb/   Related Links:   *Technocratic Pragmatism, Bureaucratic Expertise, and the Federal Reserve* by Peter Conti-Brown and David Wishnick https://www.yalelawjournal.org/feature/technocratic-pragmatism-bureaucrat

Scott Sumner is David’s colleague and the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center. Scott is also a returning guest to the podcast and joins David on Macro Musings to discuss his new book, The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy. Specifically, David and Scott discuss common misconceptions about the 2008-09 Recession, why bubble narratives too often miss the mark when explaining rising asset prices, whether the Fed’s adoption of average inflation targeting signals that it is moving toward a level target, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Scott’s Twitter: @ScottSumnerTMI Scott’s blog: https://www.themoneyillusion.com/ Scott’s Mercatus profile: https://www.mercatus.org/scholars/scott-sumner   Related Links:   *The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy* By Scott Sumner https://www.mercatus.org/publicatio

Chris Russo is a post-graduate research fellow in the Monetary Policy Program of the Mercatus Center at George Mason University and is a former economist at the New York Federal Reserve Bank. He re-joins Macro Musings to talk about the growing concerns over the US debt ceiling, what it could mean for the economy, and how to fix the issue.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Chris’s Twitter: @RussoEcon Chris’s Mercatus profile: https://www.mercatus.org/scholars/christopher-russo Chris’s Github site: https://christopher-russo.github.io/about/   Related Links:   *Permanently Suspend the Debt Limit* by Christopher Russo https://thehill.com/opinion/finance/553827-permanently-suspend-the-debt-limit   *What the Fed Will Do if Congress Doesn’t Fix the Debt Ceiling* by Christopher Russo https://www.barrons.com/articles/inside-the-feds-playbook-for-a-dollar-default-51622055588   *America’s Need to Pay Its Bills Has Spawned a Political Game* by Jim Tanke

Hanno Lustig is a professor of finance at Stanford University, and a senior fellow at the Stanford Institute for Economic Policy Research. Hanno joins David on Macro Musings to discuss his work on dollar safety, safe assets, convenience yields, and more. More specifically, Hanno and David discuss the dollar dominance in global financial markets, how the US’s status as the world’s safe asset provider reinforces its exorbitant privilege in money markets, whether the countercyclical demand for safe assets can help explain why US inflation has been so low this past decade, how years of low interest rate policy might have contributed to the growing wealth gap, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Hanno’s Twitter: @HannoLustig Hanno’s Stanford profile: https://www.gsb.stanford.edu/faculty-research/faculty/hanno-lustig   Related Links:   *Dollar Safety and the Global Financial Cycle* by Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lu

Megan Greene is a senior fellow at the Harvard Kennedy School of Government and was formerly the global chief economist at Manulife John Hancock Asset Management. Megan is also a returning guest to the podcast and rejoins David to talk about the prospects of central bank digital currency as well as how to conduct climate change policy from a central banking angle.   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/ Megan’s Financial Times archive: https://www.ft.com/megan-greene   Related Links:   *Central Banks Need to Go Slow on Digital Currencies* by Megan Greene https://www.ft.com/content/21e3affe-8c57-4bac-b9c5-21b645e93d7c   *Adapting Central Bank Operations to a Hotter World: Reviewing Some Options* by the Network for Greening the Financial System https://www.ngfs.net/sites/default/files/media/2021/06/17/ngfs_monetary_policy_operations_final.pdf   *Megan Greene and Eric Lone

Joseph Wang is a former senior trader on the open market desk at the Federal Reserve Bank in New York and the author of the book Central Banking 101. He also blogs at fedguy.com and is active on Twitter. Joseph joins Macro Musings to discuss what has happened at the Fed from the operational side, and we consider its implications for money markets. Specifically, Joseph and David discuss recent events from the perspective of the Federal Reserve trading desk, Joseph’s conception of a two-tiered monetary system, continued dollar dominance in global money markets, whether the Fed’s overnight repo facility is truly a temporary facility or trending towards a permanent one, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Joseph’s Twitter: @FedGuy12 Joseph’s website: http://fedguy.com/   Related Links:   *QE Zombifies Money Markets* by Joseph Wang https://fedguy.com/qe-zombifies-money-markets/   *The Gravitational Pull of Zero* by Joseph Wang https://

Philippa Sigl-Glöckner is the director of the German think tank Dezernat Zukunft, or the Institute for Macrofinance, and was formerly a part of the German Federal Ministry of Finance. Philippa joins Macro Musings to talk about fiscal policy in Germany, as well as her new paper, *A New Fiscal Policy for Germany*. Specifically, David and Philippa discuss the historical context for German fiscal policy, the three big economic challenges for Germany, and how the country can achieve full capacity utilization in the future.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Philippa’s Twitter: @PhilippaSigl Philippa’s website: http://philippasigl.com/ Philippa’s Forbes profile: https://www.forbes.com/profile/philippa-sigl-glockner/?sh=383fb0233d30   Related Links:   *A New Fiscal Policy for Germany* by Philippa Sigl-Glöckner, Max Krahe, Pola Schneemelcher, Florian Schuster, Viola Hilbert, Henrika Meyer https://dezernatzukunft.org/wp-content/uploads/2021/07/A-new-f

Jennifer Murtazashvili is an associate professor of political science at the University of Pittsburgh and directs the Center for Governance and Markets. Jennifer is also an expert on all things Afghanistan, given her experience working there and advising governments and international organizations on issues related to Afghanistan. She also has a new book titled, *Land, the State, and War: Property Institutions and Political Order in Afghanistan*, and joins the show to talk about it. Jennifer and David also discuss the recent developments as well as long-term developments in the country and lessons for state capacity building.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Jennifer’s Twitter: @jmurtazashvili Jennifer’s University of Pittsburgh profile: https://gspia.pitt.edu/faculty-and-staff/jennifer-brick-murtazashvili   Related Links:   *Land, the State, and War: Property Institutions and Political Order in Afghanistan* by Jennifer Murtazashvili and Ili

Bill Nelson is a chief economist and an executive vice president at the Bank Policy Institute. Bill previously was a deputy director of the Division of Monetary Affairs at the Federal Reserve Board where his responsibilities included monetary policy analysis, discount window policy analysis, and financial institution supervision. Bill also worked closely with the BIS working groups and the design of liquidity regulations. Bill rejoins David on Macro Musings to discuss his article titled, “I Don't Know Why She Swallowed a Fly,” which looks back at the significant growth of the Federal Reserve, both in its reach and in its size, since the Great Recession of 2007-09. Additionally, Bill and David discuss steps the Fed could take to return to a reasonably sized institution, conducting policy with a light imprint on financial markets.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Bill’s SIFMA profile: https://www.sifma.org/people/bill-nelson/ Bill’s BPI archive

Arthur Turrell is the deputy director at the data science campus for the UK Office of National Statistics (ONS). Arthur is also a former researcher at the Bank of England and a nuclear fusion scientist. He joins Macro Musings to talk about his work at the Bank of England, the future of economic data, and his new book on nuclear fusion titled, *The Star Builders: Nuclear Fusion and the Race to Power the Planet*.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Arthur’s Twitter: @arthurturrell Arthur’s website: http://aeturrell.com/ Arthur’s Bank of England profile: https://www.bankofengland.co.uk/research/researchers/arthur-turrell   Related Links:   *The Star Builders: Nuclear Fusion and the Race to Power the Planet* by Arthur Turrell https://www.simonandschuster.com/books/The-Star-Builders/Arthur-Turrell/9781982130664   *Coding for Economists* by Arthur Turrell https://aeturrell.github.io/coding-for-economists/intro.html   *Why Software Is Eating The Worl

Kathryn Judge is a professor of law at Columbia Law School and editor of the journal of Financial Regulation. Anil Kashyap is a professor of economics and finance at the University of Chicago and is a member of the Bank of England's financial policy committee. Kate and Anil join David on Macro Musings to discuss their work on the Task Force on Financial Stability that recently released a report on how to improve financial stability in the US. Specifically, they discuss the origins of the Task Force on Financial Stability, the dynamics of the Treasury Market over the past year, why money market funds are still vulnerable despite an evolving set of regulations, the importance of rich and timely data for regulatory bodies and Congress, normalizing a financial stability mandate across regulatory bodies, the outlook of financial stability over the next decade, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Kate’s Twitter: @ProfKateJudge Kate’s Co

Larry White is a professor of economics at George Mason University and is a returning guest to the show. He rejoins Macro Musings to talk about stablecoins, the history of free banking, and money market funds reform. Specifically, David and Larry also discuss the critiques levied against stablecoins, their impact on the banking system, and why stablecoins could be considered the new version of money market mutual funds.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Larry’s Twitter: @lawrencewhite1 Larry’s GMU profile: https://economics.gmu.edu/people/lwhite11 Larry’s Alt-M profile: https://www.alt-m.org/author/white/   Related Links:   *Should We Fear Stablecoins?* by Larry White https://www.alt-m.org/2021/06/24/should-we-fear-stablecoins/   *Taming Wildcat Stablecoins* by Gary Gorton and Jeffery Zhang https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3888752   *Overview of the Recent Events and Potential Reform Options for Money Market Funds* by the Pr

Jerusalem Demsas is a policy reporter for Vox and joins David on Macro Musings to discuss the state of housing in America and its implications for policy. Specifically, Jerusalem and David discuss the current state of the housing market, whether there is a housing bubble, how the housing shortage creates avenues for discrimination, the dynamics of racism in the US housing market, the impact of zoning laws, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Jerusalem’s Twitter: @JerusalemDemsas Jerusalem’s Vox archive: https://www.vox.com/authors/jerusalem-demsas   Related Links:   *Housing Constraints and Spatial Misallocation* by Chang-Tai Hsieh and Enrico Moretti https://www.aeaweb.org/articles?id=10.1257/mac.20170388   *Is There a Housing Bubble?* by Jerusalem Demsas https://www.vox.com/22464801/housing-bubble-market-crash-supply-shortage-great-recession   *Stuck! The Law and Economics of Residential Stagnation* by David Schleicher https://

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center. Scott joins David on Macro Musings to discuss Milton Friedman's views and what he might say about some of the recent developments in monetary policy. Specifically, Scott and David talk about nominal interest rates as indicators of the stance of monetary policy, fiscal austerity as means of reducing excessive aggregate demand, Friedman’s critique of the Phillips curve and wage and price controls, what Friedman might have said about the recent inflation numbers, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Scott’s automated Twitter: @MoneyIllusion Scott’s blog: https://www.themoneyillusion.com/ Scott’s Mercatus profile: https://www.mercatus.org/scholars/scott-sumner   Related Links:   *Friedman's Smashing Success­­* by Scott Sumner https://www.econlib.org/friedmans-smashing-success/   *Inflation is a Nominal Phenomenon* by Scott Sumner https://www.econlib.o

Skanda Amarnath is the executive director of Employ America and a former hedge fund economist. He rejoins Macro Musings to talk about the fate of the Phillips Curve, the inflation outlook, the Fed’s new framework, and his vision for a better monetary policy future. David and Skanda also discuss the Fed’s flawed assessment of maximum employment, how to modify the central bank’s Summary of Economic Projections, and the significance of capacity constraints vs labor utilization.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Skanda’s Twitter: @IrvingSwisher Skanda’s Employ America archive: https://employamerica.org/author/skandaamarnath/ Skanda’s Medium profile: https://medium.com/@skanda_97974   Related Links:   *Beyond the Phillips Curve: A Dynamic Approach to Communicating Assessments of 'Maximum Employment'* by Skanda Amarnath and Alex Williams https://employamerica.medium.com/beyond-the-phillips-curve-a-dynamic-approach-to-communicating-assessments-of-ma

Agustin Carstens leads the Bank for International Settlements or the BIS in his role as general manager and previously served as the governor of the Bank of Mexico. He also served as the deputy managing director of the International Monetary Fund. Agustin joins David on Macro Musings to discuss the new BIS 2021 annual report. Specifically, David and Agustin discuss the macroeconomic developments of the past year, the distributional footprint of monetary policy, the evolving role of central banking, and the outlook for central bank digital currency (CBDC).   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Agustin’s BIS profile: https://www.bis.org/author/agust%C3%ADn_carstens.htm   Related Links:   *Annual Economic Report 2021* by the BIS https://www.bis.org/publ/arpdf/ar2021e.htm   U.S. Monetary Policy and the Global Financial Cycle* by Silvia Miranda-Agrippino and Hélène Rey https://academic.oup.com/restud/article/87/6/2754/5834728?login=true   David’s blog

Jason Furman is a former chair of the Council of Economic Advisers and is currently a senior fellow at the Peterson Institute for International Economics. Jason is also a professor at Harvard University and he rejoins Macro Musings to talk about overheating, the inflation outlook, and the right way to think about fiscal policy in an era of low interest rates.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Jason’s Twitter: @jasonfurman Jason’s Harvard profile: https://www.hks.harvard.edu/faculty/jason-furman Jason’s PIIE profile: https://www.piie.com/experts/senior-research-staff/jason-furman   Related Links:   *A Reconsideration of Fiscal Policy in the Era of Low Interest Rates* by Jason Furman and Larry Summers https://www.hks.harvard.edu/centers/mrcbg/programs/growthpolicy/reconsideration-fiscal-policy-era-low-interest-rates-jason   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

Steffen Murau is a political economist at the Global Development Policy Center at Boston University and specializes in international money and finance. He joins Macro Musings to talk about the Eurozone, its role within international monetary architecture, and the future of the dollar zone. They also discuss balance sheet hierarchies, the roles of European banks compared to their American counterparts, and the fiscal ecosystem present within the Eurozone.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Steffen’s Twitter: @steffenmurau Steffen’s website: https://steffenmurau.com/ Steffen’s GDPC profile: https://www.bu.edu/gdp/profile/steffen-murau/   Related Links:   *A Macro-Financial Model of the Eurozone Architecture Embedded in the Global Offshore US-Dollar System* by Steffen Murau https://www.bu.edu/gdp/files/2020/07/Murau-Eurozone-architecture.pdf   *The Hierarchy of the Offshore US-Dollar System: On Swap Lines, the FIMA Repo Facility and Special Drawi

Dan Smith is an associate professor of economics at Middle Tennessee State University and directs the Political Economy Research Institute at MTSU. Alex Salter is an associate professor of economics at Texas Tech University. Dan and Alex join David on a special live episode of Macro Musings to discuss their new book, Money and the Rule of Law: Generality and Predictability in Monetary Institutions. Specifically, they discuss knowledge and incentive problems in setting monetary policy, what is meant by “rule of law,” how to make monetary policy accountable, centralized versus decentralized forms of digital currencies, thoughts on free banking, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Alex’s Twitter: @alexwsalter Alex’s website: https://www.awsalter.com/ Alex’s Free Market Institute profile: https://www.depts.ttu.edu/freemarketinstitute/people/salter.php   Daniel’s Twitter: @smithdanj1 Daniel’s website: http://www.danieljosephsmith.com/a