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David Beckworth

David Beckworth



Articles by David Beckworth

Morgan Ricks on “The Money Problem,” Financial Regulation, and Shadow Banking

17 days ago

Morgan Ricks is a law professor at Vanderbilt University, former senior policy advisor and financial restructuring expert at the US Department of Treasury where he focused primarily on financial stability issues and capital market policy in response to the financial crisis. Morgan joins David on the podcast to discuss the ideas expressed in his book, “The Money Problem: Rethinking Financial Regulation,” and the implications it has for economic policy.
Read the full episode transcript
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected]
David Beckworth: Morgan, welcome to the show.
Morgan Ricks: Thanks for having me.
Beckworth: I’m glad to have you on. I’ve read your book and as

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Hugh Rockoff on Optimal Currency Areas, “Yellowbacks,” and Free Banking

17 days ago

Hugh Rockoff is a professor of economics at Rutgers University and has done extensive work on U.S. economic history, having served on the editorial boards of the Journal of Economic History and Explorations in Economic History. Hugh joins David on the podcast to discuss U.S. monetary history, the criteria for an ideal monetary union, and whether the Eurozone of today or the U.S. of the past fits these criteria.
Read the full episode transcript
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected]
David Beckworth: Hugh, welcome to the show.
Hugh Rockoff: Well thanks for having me.
Beckworth: Hugh, how did you get into economics and in particular, economic history?
Rockoff: Well I

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Nick Rowe on Monetary Basics, Milton Friedman’s Thermostat, and More

17 days ago

Nick Rowe is a professor of economics at Carleton University in Ottawa, a member of the CD Howe Institute’s Monetary Policy Council and of Carlton University’s Centre for Monetary and Financial Economics, and a popular blogger at "Worthwhile Canadian Initiative." He developed an interest in macroeconomics as he came of age in the United Kingdom during the high inflation period from the late 1960s to 1970s. Nick joins the show to discuss some of the basics of monetary economics and argues that money is the critical factor that distinguishes macroeconomics from microeconomics. He also shares his thoughts on helicopter money, which he thinks is “small beer” or not as big a deal as commentators make it out to be. Finally, David and Nick also discuss some helpful analogies Nick has used to

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Philippa Sigl-Glöckner on the Debt Brake, German Fiscal Policy, and Full Capacity Utilization

21 days ago

Read the full episode transcript:
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected]
David Beckworth: Philippa, welcome to the show.
Philippa Sigl-Glöckner: Yeah, thank you very much for having me.
Beckworth: Glad to have you on, and I want to give a shout out to Sam Bell who connected us and thought this would be a good show, and it will be a great show. I read your paper, *A New Fiscal Policy for Germany*, very interesting, and I think we’re going to learn a lot about fiscal policy as it applies to Germany, the Eurozone, broader applications than just the good old US of A here that many of the listeners probably know well. So, before we do all that, why don’t you tell us

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The Neutral Level of NGDP and the NGDP Gap: Q2 2021

August 5, 2021

The nominal GDP (NGDP) gap, a measure of unexpected changes in the dollar size of the US economy, is the percentage difference between the actual and the neutral levels of NGDP. The neutral level of NGDP, in turn, is a sum of all dollar incomes expected by households and businesses coming into a specific time period. In the second quarter of 2021, the NGDP gap was −0.10 percent, down from the −2.11 percent NGDP gap experienced in the first quarter of 2021 (see figures below).
The −0.10 percent NGDP gap means that the dollar size of the economy, $22.722 trillion, was very close to the expected $22.746 trillion. This closing of the NGDP gap implies that aggregate spending and income in dollar terms have largely caught up to their prepandemic trend levels.

By way of comparison, the

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Should the U.S. Return to the Gold Standard?

July 29, 2021

Fifty years ago next month, with inflation rising and growing trade deficits, President Richard Nixon suspended the conversion of the U.S. dollar into gold. This decision effectively ended the Bretton Woods system — the final attempt at an international gold standard — and ushered in a new era of floating exchange rates between major currencies, rather than rates fixed by policymakers.
The end of gold-backed money and fixed exchange rates has been controversial, but it remains the right decision.
Former congressman and presidential candidate Ron Paul decided to first enter politics because of his disappointment with Nixon’s decision. Some commentators have argued floating exchange rates are a major source of instability and seek a return to some sort of Bretton Woods-style arrangement.

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Skanda Amarnath on Maximum Employment, Inflation, and the Fed’s New Framework

July 9, 2021

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.
Read the full episode transcript:
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected]
David Beckworth: Skanda, welcome back.
Skanda Amarnath: Thanks for having me, David. Looking forward to our discussion

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Jason Furman on Overheating, Inflation, and Fiscal Policy in an Era of Low Interest Rates

June 28, 2021

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.
Read the full episode transcript:
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected]
David Beckworth: Jason, welcome back to the show.
Jason Furman: Good to be back and thrilled that I now have two mugs.
Beckworth: Oh, did you get your nominal GDP mugs in the mail?
Furman: I did.
Beckworth: Fantastic. Yes. So listeners, we

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The Neutral Level of NGDP and the NGDP Gap: Q1 2021

May 11, 2021

The nominal GDP (NGDP) gap, a measure of unexpected changes in the dollar size of the US economy, is the percentage difference between the actual and the neutral levels of NGDP. The neutral level of NGDP, in turn, is a sum of all dollar incomes expected by households and businesses coming into a specific time period. In the first quarter of 2021, the NGDP gap was −2.35 percent, down from the −3.98 percent NGDP gap experienced in the fourth quarter of 2020 (see figures above).  
The −2.35 percent NGDP gap implies that the dollar size of the economy was about $531 billion smaller than expected. Specifically, the neutral level of NGDP was $22.580 trillion in the first quarter of 2021, while actual NGDP came in at $22.049 trillion. This shortfall of $531 billion is a meaningful improvement

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Matteo Maggiori on the Global Capital Allocation Project, Exorbitant Privilege, and Dollar Runs

April 12, 2021

Matteo Maggiori is an associate professor of economics at Stanford University and joins David on Macro Musings to talk about global capital flows, reserve currencies, and the international monetary system. Specifically, David and Matteo also discuss the details of the Global Capital Allocation Project, the US and its status as banker to the world, the possibility we could see a major run on the dollar in the near future, and more.
Support Macro Musings and get a free NDGP Targeting mug.
Read the full episode transcript:
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected]
David Beckworth: Matteo, welcome to the show.
Matteo Maggiori: Thank you so much, David, for having me. It is

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The Neutral Level of NGDP and the NGDP Gap: Q3 2020

November 12, 2020

The nominal GDP (NGDP) gap, a measure of unexpected changes in the dollar size of the US economy, is the percentage difference between the actual and the neutral level of NGDP. The neutral level of NGDP, in turn, is a sum of all dollar incomes expected by households and businesses coming into a specific time period. In the third quarter of 2020, the NGDP gap was −4.77 percent, a significant narrowing from the −11.62 percent NGDP gap experienced in the second quarter of 2020 (see figures above).
Despite this progress, an NGDP gap of −4.77 percent indicates that the dollar size of the economy is still significantly smaller than prepandemic expectations. Specifically, the neutral level of NGDP was $22.22 trillion in the third quarter of 2020, whereas actual NGDP came in at $21.16 trillion.

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A New Way to Manage Inflation

August 27, 2020

In a historic move, Federal Reserve Chair Jay Powell today announced a new framework that will govern how the US central bank conducts monetary policy. Powell, speaking at a virtual conference, outlined the Fed’s plans to change how it approaches inflation, replacing its current policy, which raises interest rates as inflation nears its target, with the adoption of a “make-up policy” that relies on an average inflation target to determine whether to raise interest rates or not. This new approach, if credibly implemented, would be a big change from what the Fed is currently doing and could potentially dampen the business cycle.
This announcement, in short, could be very consequential for the US economy. To understand why, it is useful to take a close look at the key parts of this new

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A Fed for Next Time: Ideas for a Crisis‐​Ready Central Bank: Panel 4 Preserving Monetary Autonomy

July 9, 2020

Introductory Remarks
David Beckworth: Greetings, and welcome back to our conference titled “A Fed for Next Time: Ideas for a Crisis-Ready Central Bank.” In this conference, we are looking at ways to improve the ability of the Fed to better respond to future crises in a way that avoids entanglement with politics. This conference is being hosted by the Mercatus Center and the Cato Institute. George Selgin and I have been the hosts. We’ve had three great panels so far, ones that have looked at reforming credit policy at the Fed, better defining the boundaries between fiscal and monetary policy, and one on modernizing liquidity facilities. If you haven’t already seen them, please go check them out on the Cato website for the conference event.
George and I have been taking turns hosting the

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The Neutral Level of NGDP and the NGDP Gap: Q1 2020

May 14, 2020

The nominal GDP (NGDP) gap, a measure of the stance of US monetary policy, is the percent difference between the actual level and the neutral level of NGDP. The neutral level of NGDP is the dollar size of the economy when monetary policy has been neither expansionary nor contractionary. In the first quarter of 2020, the NGDP gap experienced its sharpest decline since 2008, falling to −2.03 percent (see figures above).
The sudden decline in the NGDP gap indicates that the COVID-19 crisis has morphed from a supply shock—a sudden decline in the productive capacity of the US economy—into an even larger spending shock. To be clear, the sharp drop in the NGDP gap does not mean that the Federal Reserve (Fed) has intentionally tightened monetary policy. Instead, it indicates that  monetary

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James Sweeney on the Money View Framework and COVID-19’s Implications for the Macro Economy

March 18, 2020

James Sweeney is the chief economist at Credit Suisse and joins the show 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.
David Beckworth: Our guest today is James Sweeney. James is the chief economist of Credit Suisse and joins us today to talk about the coronavirus or COVID-19, and its implications for the economy. Especially, what it means for the plumbing of the financial system, interest rates and the type of recession we might experience. James, welcome to the show.
James Sweeney: Thank you. Very happy to be here.
Beckworth: Glad to have you on.

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COVID-19 Pandemic, Direct Cash Transfers, and the Federal Reserve

March 18, 2020

The economic fallout from the pandemic of COVID-19 is likely to be large. Entire portions of the US economy are shutting down, and some forecasters are predicting that GDP will contract as much as 10 percent in 2020. Jason Furman, former chair of the Council of Economic Advisers for President Obama, believes the contraction could be even worse and surpass the depths of the Great Recession of 2007–2009. As a result, many are calling for a large government response, including direct cash transfers to households. There appears to be growing momentum for such programs, with Republican and Democratic senators calling for direct cash payments to households for the duration of the crisis. Even the White House is seriously considering this option.
At the same time, the COVID-19 shock has

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Paul Schmelzing on the 'Suprasecular' Decline of Global Real Interest Rates

February 24, 2020

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.
David Beckworth: Our guest today is Paul Schmelzing. Paul is an economic historian, a visiting scholar at the Bank of England and a postdoc at the Yale School of Management. Paul has written a riveting paper on the long history of interest rates. It is titled, "Eight

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Joseph Gagnon on Central Banks’ Ability to Fight the Next Recession

January 27, 2020

Joseph Gagnon is a senior fellow at the Peterson Institute for International Economics and formerly, a senior staffer at the Federal Reserve Board of Governors. Joseph is also a returning guest to Macro Musings. He joins the show today to discuss his recent policy brief titled, “Are Central Banks Out of Ammunition to Fight a Recession? Not quite.” Specifically, David and Joseph discuss the variety of monetary policy tools available to central banks to combat the next recession (with special emphasis on the Federal Reserve, European Central Bank, and Bank of Japan). Joseph also makes the case that the ECB should adopt a formal review of its monetary policy framework.
Read the Full Episode Transcript
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If

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Binyamin Appelbaum on "The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society"

November 18, 2019

Binyamin Appelbaum is the lead writer on business and economics for the editorial board of The New York Times, and he was previously a Washington correspondent for The Times covering the Federal Reserve and other aspects of economic policy. Binyamin is also a returning guest to the show, and joins today to talk about his new book, *The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society*. David and Binyamin also discuss Milton Friedman’s influence on economic thought during the postwar era, the history of the emergence of supply side economics, and the consequences that have arisen from committing too strongly to free market principles.
Read the Full Episode Transcript
Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you

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Bill Nelson on the Repo Market Stress, the Fed's Operating System, and the Prospects for a Standing Repo Facility

October 7, 2019

David Beckworth: Our guest today is Bill Nelson. Bill was a chief economist 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 in the design of liquidity regulations. Bill has written widely on the Fed’s operating system, and joins us today to discuss it, and the recent turmoil in money markets. Bill, welcome to the show.
Bill Nelson: Thank you. Thanks for having me.
Beckworth: Oh, it’s great to have you on. I’ve participated with you in an event at AEI. We were just talking about corridor systems, and George Selgin’s book,

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Jim Dorn on the History of Monetary Policy in Washington D.C. and its Future

October 2, 2019

David Beckworth: Our guest today is James Dorn. Jim is a vice president for monetary studies at the Cato Institute, and is the director of Cato’s annual Monetary Policy Conference. He has written widely on Federal Reserve policy and monetary reform. He has also edited more than ten books, including The Search for Stable Money, and The Future of Money in the Information Age. Jim joins us today to discuss the history of monetary policy in Washington D.C. over the past four decades, as well as some of his own recent work. Jim, welcome to the show.
Jim Dorn: Thank you, David.
Beckworth: Great to have you on. Now, I kind of cut my teeth on monetary policy reading some of your work in the Cato Journal, and the authors you’ve published there, and your conferences. I remember in grad school coming

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