Austan Goolsbee on Monetary Policy at an Unusual Time
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- Опубликовано: 8 июн 2024
- Follow the link for the full summary: bcf.princeton.edu/events/aust...
On Thursday, February 29, Austan Goolsbee joined Markus’ Academy for a conversation on, “Monetary Policy at an Unusual Time.” Austan Goolsbee is president and chief executive officer of the Federal Reserve Bank of Chicago.
A summary in three bullets
- In 2023 we saw a virtually unprecedented decline in inflation without an associated recession. In a Phillips curve framework, 2023 saw one of the largest ever drops in inflation in a year, yet unemployment remained below the natural rate.
- To understand why, we must consider the time it takes for the transmission of shocks to filter through to the economy. Supply chain shocks (repairs) take a while to work into inflation (disinflation), while it took until 2022 for the post-covid negative labor supply shock to contribute to inflation. We must also give credit to the higher than expected growth in productivity.
- In contrast to the 80s, after covid the world believed the Fed would remain steadfast to combat inflation. By anchoring inflation expectations, this was fundamental for pulling off the “golden path.” Thanks to Paul Volcker this time the Fed didn't have to fight the second dragon of getting inflation expectations back down.
[0:00] Markus’ introduction and poll questions
[8:06] The Golden Path and Inflation Dynamics: (1) Supply chains and (2) the labor market
[26:01] The Golden Path and Inflation Dynamics: (3) Puzzles in housing inflation and (4) productivity growth
[54:25] A note on non-bank financial institutions
[59:18] This time, ending on a cautious note
Great presentation and learning. Thank you very much
Austan, great presentation, but, hey, no mention of the money supply at all??? Has any form of monetarism completely disappeared??
No mention of productivity reducing policy actions from ever increasing regulation on corporations by the government agencies and now corporate minimum taxes. These are not about start-ups but established large businesses (and prospective foreign direct investments).
As some doubts are raised about using the Phillips curve, an educational video providing a comprehensive overview is recommended for theoretical understanding here: ruclips.net/video/zcUBH9Zp2kY/видео.html , while a video demonstrating practical application is here: ruclips.net/video/NUo-ERHgojY/видео.html.
Goolsbee is so cocky.... Keep doing victory laps about QE, FED has abused QE since 2008 and got drunk off their own koolade. I will be back to clip the 49:00 min mark in a few months.