My latest macro musings podcast is with Brad DeLong. Brad is a professor of economics at the University of California at Berkeley, a research associate of the National Bureau of Economic Research, and a former deputy assistant secretary of the U.S. Treasury under President Bill Clinton. Brad’s work ranges from business cycle dynamics to political economy to economic history. He has published widely in these fields and is one of the pioneers in the economic blogosphere.
Brad and I sat down to discuss a number of interesting topics. We started with his new book that he coauthored with Stephen Cohen titled “Concrete Economics: the Hamilton Approach to Economic Growth and Policy”. Among other things, we talked about the books pragmatic policy prescriptions outlined in the book and what they mean for today. The book also provided a good historical context for a discussion on whether the the current wave of populism and nativism is truly new.
We also discussed the transformation of macroeconomics as outlined in his 2000 Journal of Economic Perspectives titled “The Triumph of Monetarism?” This article argued much of New Keynesian macroeconomics was largely a micro-founded reformulation of Milton Friedman's macroeconomics. We discussed how this understanding has changed over the past sixteen years.
Finally, we consider why policymakers failed to fully restore nominal demand after the Great Recession. Brad notes that it was widely understood that this was what macroeconomic policy was supposed to do, it was standard operation procedure. That it did not happen after 2009 remains something of a puzzle. It was a fun conversation throughout.
You can listen to the podcast via iTunes, Sound Cloud, Stitcher, or your favorite pocast app. You can also listen through the embedded player above. And remember to subscribe since more guests are coming!
Related Links
Brad DeLong's Blog
Brad DeLong's Twitter Account
In the US, it looks like demand has been fully restored. Your problem is not understanding what 'full demand' is.
ReplyDeleteDemand, and GDP, tanked in 2007-08 and it looks like Bernanke dithered in order to create a Great Recession out of a housing bubble in 4 states. I would say that was a liquidation, not unlike that quoted by Hoover that was desired by Andrew Mellon way back in the Great Depression. The Fed is a liquidator. Sad, and hurtful to the middle class. The Fed could have bought commercial paper, could have bought the bad loans off the banks before housing in the whole nation crashed, could have stopped mark to market from ever happening, etc, etc. It was almost like the Fed wanted the houses back for Wall Street.
ReplyDeleteThere is something wrong with my link when it comes to blogger. It does not direct properly to the site. If you are interested you could copy and paste this, to the article showing that the Fed really did have options: http://www.talkmarkets.com/content/financial/fed-great-depression-and-great-recession-liquidations-go-unexplained?post=91522&uid=4798
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