Joey Politano is an economist and a commentator who writes a popular Substack newsletter on economics. Joey is also a returning guest to Macro Musings, and he rejoins David to talk about the AI investment boom and broader economic growth trends. Specifically, David and Joey also discuss generational differences in economic perspectives, the increased demand for nuclear energy, the importance of AI in driving scientific research, and much more.

Transcript for this week’s episode.

Joey’s X: @JosephPolitano

Joey’s Bluesky: @josephpolitano.bsky.social

Joey’s Substack

David Beckworth’s Twitter: @DavidBeckworth

Follow us on Twitter: @Macro_Musings

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

Join the Macro Musings mailing list!

Check out our Macro Musings merch!

Related Links:

*The AI Investment Boom* by Joey Politano

Timestamps:

(00:00:00) – Intro

(00:03:09) – The Competition Between X and Bluesky

(00:10:55) – The Generational Differences in Economic Perspectives

(00:16:23) – Breaking Down the AI Investment Boom

(00:23:55) – Have We Left Behind the World of Secular Stagnation?

(00:27:47) – Did ChatGPT Kickstart the Next Chapter of Growth?

(00:34:35) – AI and Increased Demand for Nuclear Energy

(00:39:45) – The Importance of AI in Driving Scientific Research and Growth

(00:44:34) – The Current State of Economic Growth

(00:53:40) – Outro

Jeffrey Lacker is a senior affiliated scholar at the Mercatus Center, and he previously worked at the Federal Reserve Bank of Richmond, where he served as its president from 2004 to 2017. Jeff is also a returning guest to the podcast, and he rejoins David on Macro Musings to talk about the history of the Federal Reserve’s credit policy, as well as a recent Shadow Open Market Committee conference.

Transcript for this week’s episode.

Jeffrey’s website

Jeffrey’s Mercatus profile

David Beckworth’s Twitter: @DavidBeckworth

Follow us on Twitter: @Macro_Musings

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

Join the Macro Musings mailing list!

Check out our Macro Musings merch!

Related Links:

*A 50-Year Retrospective on the Shadow Open Market Committee and its Role in Monetary Policy* — A conference hosted by the Hoover Institution

*From the “Lender of Last Resort” to “Too Big to Fail” to “Financial System Savior”: Federal Reserve Credit Policy and the Shadow Open Market Committee* by Jeffrey Lacker

*Last Resort Lending: Classical Thought vs. Modern Federal Reserve Practice* by Jeffrey Lacker

Timestamps:

(00:00:00) – Intro

(00:01:47) – The Shadow Open Market Committee and its Contributions Throughout Time

(00:05:32) – Highlights from the Recent Shadow Open Market Committee Conference

(00:10:17) – From FAIT Back to FIT?

(00:14:07) – *Federal Reserve Credit Policy and the Shadow Open Market Committee*: Motivation and Summary

(00:16:05) – Breaking Down the Difference Between Credit Policy and Monetary Policy

(00:22:10) – The Four Doctrines of Fed Lending: The Monetary Stability Doctrine

(00:28:56) – The Four Doctrines of Fed Lending: The Real Bills Doctrine

(00:34:49) – The Four Doctrines of Fed Lending: Warburg’s Mercantilism

(00:39:11) – The Four Doctrines of Fed Lending: Too-big-to-fail and the Reluctant Samaritan

(00:47:45) – Solutions for Improving the System Moving Forward

(00:55:25) – Outro

Zachary Mazlish is an economist at the University of Oxford, and he joins David on Macro Musings to explain some recent and important macroeconomic developments, specifically the inflation linkages to the 2024 presidential election and the macroeconomic implications of transformative AI. David and Zach also discuss transformative AI’s impact on asset pricing, optimal monetary policy in world of high growth, the causes of the slowdown in trend productivity, and more.

Transcript for this week’s episode.

Zach’s Twitter: @ZMazlish

Zach’s Substack

Zach’s website

David Beckworth’s Twitter: @DavidBeckworth

Follow us on Twitter: @Macro_Musings

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

Join the Macro Musings mailing list!

Check out our Macro Musings merch!

Related Links:

*Yes, Inflation Made the Median Voter Poorer* by Zachary Mazlish

*Transformative AI, Existential Risk, and Real Interest Rates* by Trevor Chow, Basil Halperin, and Zachary Mazlish

*Decomposing the Great Stagnation: Baumol’s Cost Disease vs. “Ideas Are Getting Hard to Find”* by Basil Halperin and Zachary Mazlish

*The Unexpected Compression: Competition at Work in the Low Wage Labor Market* by David Autor, Arin Dube, and Annie McGrew

Timestamps:

(00:00:00) – Intro

(00:04:03) – Inflation Made the Median Voter Poorer: Comparing Periods of Wage Growth

(00:15:26) – Inflation Made the Median Voter Poorer: The Median Change in the Wage

(00:22:19) – Assessing the Feedback to Zachary’s Article

(00:25:05) – The Significance of Transformative AI and its Double-Edged Sword

(00:27:02) – The Impact of Transformative AI on Asset Pricing and its Policy Challenges

(00:38:07) – The Broader Macroeconomic Effects of Rapid Growth

(00:41:05) – Optimal Monetary Policy in a World of High Growth

(00:43:19) – Exploring the Causes of the Productivity Slowdown

(00:49:21) – Outro

Ellen Correia Golay is an advisor in the Markets Group at the Federal Reserve Bank of New York, focusing on the US Treasury market. She also helped lead an interagency working group report and a recent conference on the Treasury market. Ellen joins David on Macro Musings to talk about these and other Treasury-related developments. Ellen and David also discuss her career journey and role at the New York Fed, the current and future challenges in the Treasury Market, necessary areas for reform, and more.

DISCLAIMER: Ellen Correia Golay’s views are her own, and they do not represent those of the Federal Reserve Bank of New York or the Federal Reserve System.

Transcript for this week’s episode.

Register now for Building a Better Fed Framework: The AIER Monetary Conference.

Ellen’s LinkedIn profile

David Beckworth’s Twitter: @DavidBeckworth

Follow us on Twitter: @Macro_Musings

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

Join the Macro Musings mailing list!

Check out our Macro Musings merch!

Related Links:

*Enhancing the Resilience of the U.S. Treasury Market: 2024 Staff Progress Report* by the Inter-Agency Working Group on Treasury Market Surveillance (IAWG)

*The 2024 U.S. Treasury Market Conference* — An event hosted by the Federal Reserve Bank of New York

Timestamps:

(00:00:00) – Intro

(00:03:09) – Ellen’s Career Journey and Role at the New York Fed

(00:17:13) – Breaking Down the Treasury Market

(00:20:38) – Current and Future Challenges in the Treasury Market

(00:29:54) – How Would Central Clearing Impact the Fed and the Treasury Market?

(00:31:47) – Explaining the Treasury Department Buyback Program

(00:36:12) – Commencement of Data Dissemination on Individual Nominal Coupon Treasury Transactions

(00:38:29) – Requiring the Reporting of Non-Centrally Cleared Bilateral Repos

(00:41:26) – The 2024 U.S. Treasury Market Conference

(00:43:50) – Future Areas for Reform in the Treasury Market

(00:46:43) – Outro

Loretta Mester was president and CEO of the Federal Reserve Bank of Cleveland from 2014 through June of 2024, and she is a 39-year veteran of the Federal Reserve System. Loretta is also currently an adjunct professor of finance at the Wharton School at the University of Pennsylvania. She joins David on Macro Musings to talk about her time as Fed president and a recent paper she delivered on the Fed’s operating system. David and Loretta also discuss the ongoing battle against inflation, what to expect from the upcoming Fed framework review, and much more.

Transcript for this week’s episode.

Register now for Building a Better Fed Framework: The AIER Monetary Conference.

Loretta’s Cleveland Fed profile

Loretta’s Wharton profile

David Beckworth’s Twitter: @DavidBeckworth

Follow us on Twitter: @Macro_Musings

Check out our new AI chatbot: the Macro Musebot!

Join the new Macro Musings Discord server!

Join the Macro Musings mailing list!

Check out our Macro Musings merch!

Related Links:

*The Fed’s Ample Reserves Monetary Policy Operating Framework: It Isn’t as Simple as it Looks* – Remarks by Loretta Mester for the Panel on The Conduct of Monetary Policy: Evolution from Free Reserves to the Corridor and Floor Systems at the Shadow Open Market Committee 50th Anniversary Conference

*Reserve Demand Elasticity (RDE)* by the Federal Reserve Bank of New York

Timestamps:

(00:00:00) – Intro

(00:02:18) – Loretta’s Career Path and Tenure at the Cleveland Fed

(00:10:42) – The Ongoing Battle Against Inflation

(00:17:53) – Evaluating FAIT and What to Expect from the 2024-25 Fed Framework Review

(00:26:03) – Corridor vs. Floor: The Evolution of the Fed’s Operating System and its Policy Implications

(00:41:31) – Estimating the Demand for Bank Reserves

(00:45:57) – Addressing Over-reliance on the Fed in the Interbank Market

(00:52:45) – Loretta’s Thoughts on Central Clearing and Increased Use of the Discount Window

(00:55:23) – Outro