Macro Musings 2024 Retrospective

David Beckworth and producer Sam Alburger dive into the last year of Macro Musings. They pick their favorite episodes, discuss how the year 2024 will be remembered in the macroeconomic history, highlight stories about the making of the show, combine David’s love for basketball and economics, and much more. 

Check out our new AI chatbot: the Macro Musebot!

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: Welcome to Macro Musings, where each week we pull back the curtain and take a closer look at the most important macroeconomic issues of the past, present, and future. I am your host, David Beckworth, a senior research fellow with the Mercatus Center at George Mason University, and I’m glad you decided to join us.

Sam Alburger: Hello, Macro Musings listeners. This is Sam Alburger, one of the producers of the show and the guest host for a very special 2024 Macro Musings year-in-review episode. David has so graciously handed over hosting duties to me today, so I can ask him a couple of questions. In today’s episode, we’re going to go through David’s top episodes of the year, share some behind the scenes about making the show, and get David’s opinion on how the year of 2024 will go down in macroeconomic history.

Now that you know what’s in store, I need to bring in our guest. He is a doctor of economics, a champion of nominal GDP-level targeting, and your normal host of Macro Musings—doctor, researcher, host, and my good friend, David Beckworth.

Beckworth: Thank you, Sam, for that very gracious introduction.

Year in Review

Alburger: David, this has been a fantastic year here at Macro Musings. We released 53 episodes, started releasing videos on both Twitter and YouTube, generated nearly a million impressions on social media, had our first active Fed president join us at the Mercatus office for a recording. How are you feeling looking back at the last year of the Macro Musings podcast?

Beckworth: It’s been a great year. We’ve had a lot of fun, a lot of great guests. Sam, it’s been great to work with you. You’ve brought a lot of energy, new ideas. The videos that you mentioned, that was your thinking. It’s been fun to push the envelope on podcasting. We’re doing more videos, you mentioned. Also more engagement with fans. We’ll talk about that later, but a lot has happened this year in macroeconomics, we’ll talk about later. It’s been a great year, and I really appreciate all the engagement from the fans and the people who have listened, people who have come up to me.

Just this week I was at a conference, I had people come up to me and tell me they love the show. I’ve had students, I’ve had professors, I’ve had people at the Federal Reserve tell me they love the show. Thank you everyone who has been listening and has made ’24 the year that it is.

Alburger: Absolutely. It’s been an incredible year, and it’s been an awesome year working with you. David, we have had an incredible slate of guests this year, from Fed officials to academics to journalists, covering everything from dollar dominance to the Fed’s framework review to treasury markets. We talked about the history of US monetary policy dating all the way back to the 1800s, big changes in monetary policy in South America and Europe, and projected into the future with conversations about Fed independence. We truly ran the macroeconomics gambit. I know I’m asking you an impossible question, but could you pick a few episodes from this year that stood out as your favorites?

David and Sam’s Favorite Episodes

Beckworth: Okay, so like any good parent, I will say all the episodes are my favorites. I don’t have any favorites. I love all of you guests equally. With that said, just to make this work, I’ll highlight five episodes I think that really resonated with me. The first one—and this is no particular order or ranking, just I’m going to throw the five out there—Emilio Ocampo, he was an adviser to President Milei, Argentina. And it was really fascinating to talk to him because, as you know, Argentina’s had hyperinflation, a lot of things have been a mess there, and Milei has come in and has actually made a meaningful difference. Inflation has actually fallen dramatically. He’s done a lot of market reforms on top of that, and something that Emilio really stressed is people actually can feel the difference. Even though inflation is still high, it’s come down a lot. I really enjoyed hearing that and the prospects of dollarization, what would it mean for them, what would it mean for us? That was a fantastic episode. 

Another episode we did recently was with Loretta Mester, former president of the Cleveland Fed. It was great to have her in. She shared her journey, what it was like to work both at the Philadelphia Fed, she was a research director there, then the Cleveland Fed, and then her work in a paper on the Fed’s operating system. That was a lot of fun. She was here in studio, and as you recall, Sam, she was game because afterwards we did a lot of reels, clips—I haven’t released all of them—but I asked favorite team, was it a Cleveland team or a Philadelphia team, it was back and forth. Thanks, Loretta, for being a sport there. 

Another one I want to throw out there is Rich Clarida, because we went to his office in New York City, and it was PIMCO, and that was a lot of fun. We have talked over the years, Rich and I have spent some time talking. When he was vice chair at the Federal Reserve, he invited me into his office, I made the case for nominal GDP targeting. And just a real funny story: So I met him at a conference about a year or two ago, and he came to me and he said, “Hey David, the Federal Reserve, we returned nominal GDP to its trend path in 2021, and I did not get a bouquet of flowers from you. You told me to do it. We did it.” And of course they overdid it, they overshot it by quite a bit.

A fourth one, Joe Hazell, he was on twice this year, but he brought some energy, it was a lot of fun to engage with him. And Joe is a guy that actually followed me back when I was blogging, back in the blogging glory days. And, of course, Joe is like a rock star in the profession now, so it was fun to engage with him, and a lot of fun talking about Phillips curves and inflation and such. 

Then the last one, number five, I’ll stop there, but this is really, it’s really two people, two shows put together, but it deals with economic growth. We talk a lot about business cycles on the show, and the Fed, and short-term horizons, which is fun and all, but really what matters for the well-being of everybody is, over the long run, how much are we growing? Mark Koyama came in. He has a great book on long-run economic growth. And then Catherine Pakaluk came in and she talked about fertility rates, just two topics that really resonate with me, and if I could wave a magic wand and change fertility rates and productivity growth rates and things like that, it would solve a lot of the problems that we face. Those, I’ll put as the five that I have to choose. Again, I love all the guests of all the episodes.

Alburger: Sure, absolutely, that was a great list, and I have a couple more questions touching on some of the episodes that you talked about, but also some episodes that stood out to me as well. We truly did have an incredible slate of guests this year, a group of guests that spanned such a wide horizon of economic topics, and ultimately I think we had a really successful group of guests this year. And it was really fun interacting with them behind the scenes and watching you do your thing on the podcast.

I want to touch on a couple of episodes that really stood out to me, both on the podcast but also behind the scenes-wise, and the first one is Mary Daly. Having Mary Daly, a current Fed president, come to the office and record an episode in front of our Mercatus staff and scholars was a first for us here at Macro Musings. Can you tell us the story of how that show came together and what it’s like to interview a current Fed president?

Beckworth: Yes, that was a lot of fun. She actually reached out, or her staff, I should say, reached out to our current executive director, Ben Klutsey, I guess on LinkedIn, and then he contacted us. And really a big part of the story, you’re being very modest, Sam, is you, because we were thinking we’d just do a regular podcast, bring her into the studio. But then Sam’s like, “No, no, let’s go big. Let’s do a live event, invite the staff.”

Because sometimes the staff here at Mercatus don’t get to engage with the podcast. So maybe it’s important to note to the listeners, like many businesses, you get stuck in your silos, you do your thing, you don’t know what’s going on in the other part of the organization. So this was a chance for everyone at Mercatus to come out. We had a nice crowd show up, and so it was great. They came. She, of course, was very energetic, she had a great story. We talked about more than just monetary policy.

Alburger: Absolutely.

Beckworth: She had an amazing story about her career, rags-to-riches story. Also, she’s a big sports fan, so we had a fun time talking about that. And I got to hang out with her before and afterwards a little bit. And she’s an artist, so a lot of cool things about her, and it was just a great time to have her here in the studio.

Alburger: Absolutely. I ended up being the first person in the office that interacted with her when she came through the doors. I stuck out my hand and said, “President Daly, I’m Sam, very nice to meet you.” And just to show the person she was, she said, “Cut the BS, Sam, I’m Mary.” That was the energy that she brought. It was this real raw and impassioned energy that she’s bringing to the Fed and also brought to the podcast, which I thought was really awesome. So, fans, if you haven’t checked out that episode, I think it’s really worth checking out. It’s not just cookie-cutter. She talks about a lot of really interesting stuff on that episode.

Beckworth: Absolutely.

Alburger: Another episode that you talked about, Rich Clarida, we took a trip, the two of us, this past year to New York City to interview a few guests, and one of those guests was Rich Clarida. And he had us meet him on the 46th floor of the PIMCO building in Manhattan. It was quite the view.

Beckworth: It was awesome.

Alburger: It was the best backdrop we may have ever had. This one’s very nice, but the backdrop there was incredible. For audio listeners, there is a photo of that recording that I’ve put down in the transcript if you want to check that out. 

Alburger: Tell us about interviewing Rich Clarida in New York and learning more about his hobby of making music.

Beckworth: Yes, no, that was fun. Again, as I mentioned, Rich and I have this history going back a few years. In fact, actually, it goes back to 2016 because I presented a paper at the Hoover monetary policy conference and I had updated some work on a previous paper that he had commissioned and we ended up sitting together at a meal. He was very engaging, even when he didn’t know who I was. He was very friendly. I was a young academic at the time. I appreciated that support from him.

Then we continued to talk and he started following the podcast and he came up to me multiple times while he was vice chairperson. “Hey, I love your podcast.” In fact, he told me this. He said, “David, my wife runs into me one day, says, ‘Rich, you got to come listen to this podcast.’” His wife was listening to the podcast, told him to listen to the podcast.

Alburger: That was awesome.

Beckworth: We go to the PIMCO building. I think if I remember correctly, they had a grand piano in the lobby of PIMCO. It was being played.

Alburger: They did.

Beckworth: It was very amazing. Folks at PIMCO have a good time coming to work. I guess that relieves the stress of working in the bond market. We go upstairs and I think many people who follow Rich know that he’s a musician. He has an album out. If I remember correctly, you and him started talking shop about microphones and instruments and recording gear, right?

Alburger: We did. We definitely talked shop about mics. That was really cool. One of the things that we didn’t get on audio that I was very sad [about]—he was showing us a collection of records in his office actually afterwards—was that him and Powell actually had these Christmas concerts every year on the Fed floor. They would get down, they’d play their guitar, and they’d sing for Fed staffers and Fed officials, and they do some Christmas stuff. Mainly, he said it was just an excuse for them to play whatever they wanted. Yes, it was a jam.

Beckworth: Yes, I think he said that there were sometimes also, because they’re on the same floor in the Eccles building, they would after hours go to each other’s offices and string some chords on their guitar. Another way to deal with the stress of the work.

Alburger: Sure, absolutely.

Beckworth: Play your guitars together. That’d be a great picture if we ever saw that. Yes, he’s worked on this album. I believe he’s working on another album, he said. We just had a lot of fun talking with him. We did a bonus episode on his music career. Now, I believe his dad was in music or professor of music. He played music as a high school student. He was really in that environment, was in a band. Then cut his own album.

Alburger: It was really cool. He gave us permission to use his own music in that bonus episode.

Beckworth: Oh, yes.

Alburger: Which you can hear in that bonus episode. I definitely think it’s worth checking out.

Beckworth: That was awesome. Yes. Thanks, Rich.

Alburger: Yes. Thank you, Rich. 

New Macro Musings Content

In addition to the video content that we’re now posting for each episode, you’ve started posting your own short-form content on Instagram. Listeners, if you haven’t checked it out already, we’ll link to David’s account in the show notes. You can also follow him on Instagram @David_Beckworth. Tell me more about who might have inspired this new content and how it’s going so far.

Beckworth: Sam, you were the one who inspired this new content. You and I guess Kyla Scanlon. She came in because she’s real big on social media. You young hipsters are trying to get us old folks to be more relevant. I have, of course, teenage children and college-age children who are on other apps besides Instagram that will remain unnamed here. They’ve encouraged me to cross-post those places.

You encouraged me to show a behind-the-scenes look at the podcast, also to have some fun. Also, this is partly motivated by our desire to really get out the message in the Fed framework review. I have some clips on conferences I’ve been to. I’ve had some clips of behind the scenes. Now that we know that the framework is going to be launched in January, we are going to be rolling out more video clips to highlight points that we want to make about the framework review.

Alburger: Absolutely. The content David is making is great and it’s ever improving. It’s been very fun to be subjected to David’s videos.

Beckworth: Yes, Sam’s in one of my behind-the-scenes video of Macro Musings’ podcast. Yes, Sam had to teach me CapCut and all the tricks and tools of the trade.

Alburger: Absolutely. It’s been very cool to see David get into that. Speaking of Kyla Scanlon, let’s talk a little bit about Gen Z. David, as you can probably tell by the terrible mullet that I’m sporting here that I’m a resident member of Gen Z. I’m here on the Macro Musings staff and helping to try and get our important content out there to young people and students. We’ve had a couple of Gen Z guests this year on the show. Recently, Kyla Scanlon and Joey Politano. What have you learned about what’s important to young people in terms of the economy from both of these shows?

Beckworth: I think it’s really interesting to look at them and what concerns them as you suggested compared to millennials, the generation before, because when this show started, there were a lot of millennials. That was the young generation when we started the show and they had cut their teeth, had their experience through the Great Recession of 2008, 2009, or the great financial crisis of 2007 and 2009. For them, that was their defining moment where we had a financial crisis. We had a collapse in aggregate demand. The economy grew slowly. It was too low inflation. 

The Gen X generation, they worry about too much being done. If anything, what they have been defined by is the inflation surge of ’21, ’22. For them, that’s the biggest macroeconomic problem. It’s not a contracting weak economy. It’s an economy that grew too fast, maybe too hot. Some of it is due to supply shocks as well, but inflation, everything got more expensive. It’s hard for housing as well, which may be a little bit different than running the economy too hot. But between high inflation, high housing prices, they’re more afraid of high prices being a constraint and not being able to get ahead.

Alburger: Absolutely. Absolutely. High prices, housing prices, cost of living, things like that, seem to really be the things that are defining Gen Z and as they make their way into the workforce in the world.

NGDP Level Targeting vs. FAIT

David, we’re recording this episode here in early December, and just recently the Fed announced that the framework review will begin in January. Chair Powell hinted in a recent interview with a Post reporter that they may officially be scrapping FAIT. We have been and will continue to do a lot of work on the show, building up the conversation around NGDP level targeting as a supplement or replacement for FAIT, including our already released or soon to be released NGDP explainer video, the seven policy briefs from you and other economists, our greatest hits podcast, and the continued conversation throughout many of our past and, I’m sure, future episodes.

David, when I lay all of that out there, this is a major push that we’re making, and you are a well-documented champion of NGDP level targeting. Can you tell our listeners why this is so important to you and for the Fed to hear, and what your goals are for this review period?

Beckworth: Yes. Let me just go back to this, the point you made that Chair Powell said that they may ditch FAIT. Now, he said nothing’s definite, but he said a base case would be that they have a basic reaction function where they don’t promise to overshoot if they’ve undershot the target, which, in my mind, means they’re not going to do makeup policy, which would be a big mistake. I’ve been a champion of makeup policy. If the Federal Reserve or central bank makes a mistake in the past, they shouldn’t let bygones be bygones. I like to see it done in terms of a nominal GDP level target, but at a minimum, maintain some form of makeup.

Why do it in terms of a nominal GDP level target? I think it makes the job easier for the Federal Reserve. The nominal GDP level targeting is you’re targeting total dollar spending or equivalently total dollar income, every dollar spent is a dollar earned, and you keep your focus on that. In the near term, you don’t worry about variation in inflation, because you can have supply shocks that throw the price level around. Maybe it goes up, it goes down. You just stabilize the total dollar size of the economy, how fast it grows. Then over the medium to long run, you will also stabilize the inflation rate. You can actually get a two-for-one deal. Who doesn’t want a two-for-one deal?

Alburger: Nobody.

Beckworth: I bet to you J. Powell likes two-for-one deals. In fact, I have an article out with Pat Horan, one of our colleagues here, that if the Fed were to adopt a nominal GDP level target, they would effectively get thrown in a medium-run inflation target. That’s the beauty of this. Again, it makes it easier. You just step back. You don’t try to play God and say, “Hey, was inflation up because of supply shocks, demand shocks?” It really simplifies the life of the Federal Reserve, as we point out in all these materials that you’ve mentioned.

I think it would go a long way. Now, I’m under no illusion the Fed’s going to jump in the deep-end pool of nominal GDP level targeting. I do think, as you suggested, they could use it as a cross-reference or as a benchmark. If you want to stick with your regular inflation targeting framework, great. You could always cross-check. What are nominal GDP forecasts telling us? Something like that in, say, 2008 would have been useful to the Fed, or in 2021 would have provided added information that may have led to better outcomes.

Alburger: Yes, absolutely. Listeners, there’s been some content that we’ve already put out touching on this and trying to raise awareness of this during the framework review period that’s upcoming. Be on the lookout for more content coming your way in the next month as things get up and moving at the Fed. 

Preparing for Macro Musings Interviews

David, to touch back on another episode that really stood out to me this year, we gained a friend from over across the pond. That was ECB executive board member Isabel Schnabel, who might have sent us the best picture we have of one of these NGDP targeting Macro Musings mugs, one of those mugs. And it’s the one that I’m actually holding here for video listeners. Audio listeners, we’ve included a picture she sent us in the transcript. 

Alburger: She was a delight to have on the show and has stayed engaged with our podcast throughout the year. David, my question to you on this is, how do you prep for an episode with a central banker who works on a completely different banking system than we have here in the US?

Beckworth: That’s a great question. Before I answer that, let me throw a little backstory in since we’re talking about behind the scenes here. Listeners, when we do remote recordings, and by that I mean not here in the studio, but when we’re away, maybe at home or in a hotel—in fact, that one I believe I was in a hotel. I was getting set up, and we used something called Riverside. You’re always there, Sam, even if you’re in the other part of the country or the world. You’re there. In that case, you were there in your home. Just imagine, listeners, there’s three screens, usually four. Someone like Isabel Schnabel is going to have her handler there as well. She’s there on one screen. I’m on a screen. Here’s Sam. Sam’s walking us through the technical issues. What’s amazing is in Sam’s apartment, on the wall behind him where he sits in front of his computer, there’s a wall of hats.

Alburger: Sure, much to the chagrin of my girlfriend.

Beckworth: Yes, so I bring this up because Isabel really loved that wall of hats. Tell us a story.

Alburger: Yes, so I have too many hats, according to my mother and my girlfriend. I have this collection of hats. Directly behind my computer is my fancy hats, if you will. I have cowboy hats and newsboy caps and other hats like that, a millennial hat, if you will.

Beckworth: There you go.

Alburger: Then I have a couple racks of snapback hats as well. As we’re getting prepped for the recording, Isabel points out that there’s a cowboy hat behind me and how she’s never seen a cowboy hat in real life or someone wearing it. I can’t remember the exact context of that. She points out the cowboy hat and asked me to try it on. While David’s trying to get this podcast on the road and I was trying to get the podcast on the road, I said, “I’ll go on and I try on my cowboy hat.” And I put it on. I’m trying on multiple cowboy hats and doing all the stuff that you want to do because she’s a very powerful lady. I’m just a podcast producer.

Beckworth: Yes, that was great.

Alburger: It worked out very well. It worked out very well and she stayed connected with the show.

Beckworth: Absolutely. As you said, she later took a picture of the nominal GDP targeting mug in her office. It’s the window of this building and it’s an amazing view. Thank you, Isabel. 

How do I prepare for a show like that? You do background reading. A lot of guests, most guests, you do background reading. You read their article, their research. In Isabel’s case, she had multiple speeches. She does a lot of interesting work. She thinks seriously about these issues. In this case, we were talking about the ECB’s transition from an ample reserve or floor system to a more demand-driven one.

It’s a gentle move away from an abundant or ample reserve system toward one where there’s more interbank activity, overnight interbank activity. She had led the review of this operating system at the ECB. She’s well versed, very knowledgeable. In situations like that, you do your homework, you do your research, and you let the guests run with it. You give them questions. You need to know the material. The guests, like Isabel, they do all the hard work for you.

Alburger: Absolutely. David, just to follow up on that, you have to prep for a huge array of topics. We touched on some of that earlier in this episode. You have to be a real jack-of-all-trades, know your stuff in all these areas. How do you keep all of this information straight, week in and week out?

Beckworth: It helps that I enjoy doing it. If it was a chore, I may not be able to keep everything straight all the time. It’s a lot of fun, because we’re talking about stuff I care about. We’ve talked about this on the show before. When this podcast was first formed, Tyler Cowen and Dan Rothschild said, “I don’t know about this, David. I’m not sure a podcast on macroeconomics is going to last.” It’s been a lot of fun. Everything from financial stability issues to dollar dominance to long-run economic growth issues to macroeconomics to monetary policy, operational system, most of the topics we cover in here, all the topics we cover in here, are things that I care about and, at some level, passionate about.

That makes it easy. It’s like, I’m getting paid to study things I want to study. Sometimes I still have to pinch myself that this is a job. Now, here’s the danger, Sam. I want people to think I’m a serious macroeconomist, too, and do research. I still put out papers occasionally. I have gone places. They’re like, “Oh, David Beckworth, you’re that journalist.” It crushes my heart. No, I’m not a journalist. I’m an economist. Nonetheless, it’s been a fun ride. 

I count my blessings that I have this great opportunity here at Mercatus. I get to work with people like you. This show does not happen without someone like you making me stay in my lane. Preparation is a key part of it. You’ve got to do what you enjoy or you will burn out. We’ve been doing this since 2016, getting close to a decade. Yes, it’s been fun. You roll with it. Of course, one last thing I’ll say is in macroeconomics and in also the financial policy space, there is always something new happening, some new crisis, some new development. Things are never resolved.

Macro Musings and AI

Alburger: Absolutely. There’s always something going on in the macroeconomic sphere. Speaking of the macroeconomic sphere, our smaller Macro Musings sphere or verse, whatever word you want to use, got an addition this year. That was the Macro Musebot, an AI companion tool built off ChatGPT that allows listeners to search through our nearly 500 episodes to find cited papers or popular topics or even ask it about Molinism. David, how did the Macro Musebot come to be? Tell us about some of the fun and more practical ways you use the Musebot.

Beckworth: Yes, so there’s been a push here at Mercatus to engage more with AI. What is your department doing for AI? I was like, well, let’s do a podcast. Because actually, my boss, our leader, Tyler Cowen, used an AI bot for his new book, or most recent book, where he looked at the greatest economist of all time, the GOAT. I was like, man, let’s do that for the podcast. Let’s feed all the transcripts in and other information and let it be a place where people can go and look up material. You mentioned Mary Daly. When her staff was preparing her for this podcast, they used it to look at all the past guests, what flavor of the show.

I’ve used it to look up shows myself. If I need to ask a topic about a particular guest, I’ll use it. Sometimes I’ll ask macro questions. It’s been useful. It’s been fun. You mentioned Molinism. One time I asked a question, what would a person believe if they’re like a standard New Keynesian macro economist, but they also believe in Molinism, which is a view of God’s providence from a 15th-century Jesuit priest. It’s an interesting mix. It came out as a pretty interesting, remarkable way to reconcile those two views.

Alburger: Absolutely. If you’re a Molinist and an economist, we have the tool for you.

Beckworth: Exactly.

Looking Back at 2024 in Macroeconomic History

Alburger: Yes. Listeners, make sure you take the Musebot for a spin. It’s down in the link in the show notes. David, last question here for you before we get to some more out-there, fun questions at the end of the show. Imagine it’s 26 years from now. The year is 2050. How will economists and non-economists alike remember the year 2024 in macroeconomics and the state of monetary policy as a whole?

Beckworth: Okay, so if I had to define this year, I would say it’s been a year of transitions and reflection. In terms of transition, we’ve come to a place where inflation is finally getting close to its 2% targets. We’ve definitely left the inflation surge behind in the rear-view mirror. We’ve had a soft landing. 

How did we do it? How did we get here? This was a big part of our conversation this year. We spent a lot of shows talking about the soft landing. How was it possible? We had a number of guests talk about the Fed’s credibility: Joe Hazell, Jim Bullard, Joe Gagnon, Carola Binder, Thomas Dreschel. We talked a lot about having credible monetary policy, did a lot of the legwork, the lion’s share to get things down as well as supply shocks reversing themselves. 

We also had some guests talk about non-linearities and macro. We had Gauti Eggertsson, Joe Gagnon again, and even we mentioned Governor Chris Waller. They all reconciled what has happened to soft landing with non-linearities in the economy, which means you don’t have straight linear relationships. The Phillips curve may be non-linear. The Beveridge curve is non-linear for Chris Waller.

We also had Eric Leeper, who used the fiscal theory, the price level, to make sense of what happened. I think one key theme of this year is we went from an inflation surge back down to target or very close to it without a recession.

Alburger: Sure.

Beckworth: Major transition. We’re moving on from that. We tried to make sense of it this year on the podcast. A lot of discussions on that. 

Another, I think, transition or maybe at the beginning of a transition looking forward is we had a lot of discussions this year about operating systems at central banks. You mentioned Isabel Schnabel. They’ve made a change. What’s interesting, the ECB is not the only one who’s making a change in its operating system. The Reserve Bank of Australia, the Riksbank from Sweden, the Bank of England, and then the Nordic Bank has done it already. It’s been a few years, but there’s a number of advanced economy central banks are making changes in the operating system.

The Fed’s a little behind the curve here, but I think, either all those central banks know something or they’re wrong. I suspect they know something that we’re just a little bit slower to get with. I think we’re going to see this pattern continue as the Fed continues to wrestle with its large balance sheet. That’s a transition I think is going to happen going forward. We already mentioned the Fed framework. This is the year when we really were thinking and getting ready for the Fed framework review. We don’t need to spend more time on that. 

Then I’d say Treasury market resiliency. A lot of discussion about the Treasury market, because there are issues about its ability to handle shocks. We saw in 2020 there were some questions. Then going forward, we know there’s going to be big deficits. The supply of government debt is going to grow. We had a number of guests on the show: Josh Hendrickson, Eric Leeper, Sam Schulhofer-Wohl, Samim Ghamami, most recently, Ellen Correia Golay. We had a great time discussing reforms. One of the big things this year. This could be a huge turning point, according to many of the guests on the show. That is increased central clearing in the Treasury market. This is going to take some time. 

This is a year of transition. You’ve got the soft landing. We have questions about the balance sheets. Central banks, can big ones operate? I should mention we also had Claudio Borio on the show. Big shot from BIS. Of course, you mentioned Loretta Mester. The soft landing, the operating systems and then Treasury market resiliency issues going forward. I think all those things are big things happening. We already mentioned the Fed framework review. I think that’s a big issue as well going forward.

Alburger: Absolutely. On 2050, I’ll come knocking, and—

Beckworth: Yes, we can do it.

Alburger: —we’ll find out how we did.

Beckworth: All right.

Combining David’s Love for Economics and Basketball

Alburger: All right. David, I want to close today’s show with some fun topics. Show the listeners a side of David Beckworth that they don’t normally get to see. Until we started doing video content in June of this year, many of our listeners may not have known that you’re actually 6′ 4″, which can definitely give me, as the one who frames the camera shots, some difficulty getting both you and the guest in the same shot. 

Speaking of getting up shots, our listeners might not know that you’re quite the basketball player. Listeners, I must say, David is quite the athlete. As someone who has tried to keep up with him on a run through DC and play him in one-on-one basketball, keeping him out of the post is definitely a challenge, especially for me when I’m 5′ 7″. My question, David, to you is, do you think you’ll finally beat me in one-on-one this year? Have you been training back in Nashville?

Beckworth: To be fair, when I played you one-on-one, I had my running shoes, not having basketball shoes. Sam, he beat me one-on-one. He beat me in game of horse. That was a lot of fun. We went up to the University of Maryland one evening here and they have a nice facility. We played against each other. We played a full-court game. If I recall, the players out there were shocked to learn that I am as old as I am still playing basketball.

Alburger: Yes, I think they asked you how old you were and you told them your age. The guy goes, “Respect.”

Beckworth: Hey, if you quit playing, you’re going to lose it. You got to keep playing. Every Sunday morning back home in Nashville, when I’m there, there’s a group of us that play basketball. It’s an interesting group because, I work in DC. I’m an economist. I’m in this world. Most of the guys that play are often in a very different world. They often, when I say things, I think they think I know stuff that I don’t know, or I know people. “Hey, tell Biden, tell Trump this or this.” I don’t know these people. It’s a lot of fun. Basketball keeps me young at heart.

Alburger: Absolutely. In spirit of being young at heart and some of the fun questions you ask on Instagram reels and listeners—once again, make sure you’re following David over there—I have two basketball-related questions for you. First, who is your basketball comp, either collegiately or professionally? When you’re on the hardwood, who do you emulate your game like?

Beckworth: Sam, I’d like to say Michael Jordan, who I will say is the GOAT. Sorry, LeBron fans out there. I am not Michael Jordan. I don’t have the range of skills as he does. I’ll have to go with the Elijah Kim one because I play in the paint a lot, even though it’s getting harder as I get older. I like post moves. I like throwing fakes. I like breaking ankles down on the paint as much as I can.

Alburger: Sure. If I had to say one, just seeing David play, I’d say Isaiah Hartenstein, who’s the center for the Oklahoma City Thunder. David not only is an exceptional post player, but he’s also a great distributor from the post. He likes to get guys in actions running around him. He’s a great distributor, like Isaiah Hartenstein, who might have a chance at a title this year. All right. 

Second question. If you had to build a starting five of economists, who would you like on your pickup basketball team?

Beckworth: Because, I might be out there talking shop with the basketball players instead of playing ball if it’s too interesting. Who would I put on this team? I guess I got a mixed interest with skill level. I’d start with Ben Bernanke because I know Ben Bernanke likes to play some ball. I’m not sure how much he plays anymore, but maybe put him at point. Maybe put Jerome Powell at forward, and then I’d play center, obviously. I’m trying to think he would be my other forward and guard.

I’m going to assume Ben Bernanke would be our point guard. Then maybe I’m going to have to go with Austan Goolsbee. He’s still pretty young, so he can be our shooting guard. I’m expecting you, Austan, to hit the threes. My other forward would be Brian Sack. I think he’s pretty athletic. I assume he has a good basketball game. He’s pretty tall, too.

Alburger: Sure. David, if you had to have a sixth man, someone to bring the energy off the bench, who are you thinking?

Beckworth: Oh, definitely Mary Daly. She will supercharge any team in any activity. Mary Daly, you’re drafted.

Thank You’s

Alburger: Absolutely. All right. With that, David, our time is up. I want to thank David again for passing hosting duties off to me today. Before I go, I want to give a huge shout out to the people who make this incredible show possible. First, Marc Dupont, who reviews each episode, gets the transcript ready, writes all the copy and stays up late every Sunday to post Macro Musings at midnight so it’s in your feed, bright and early every Monday morning.

Dallas Floer, who is manning the recording today and helps provide guidance for the show along with Jeff Holmes. Jen Whistler, who is our marketing savant and works with Marc to give you a thought-provoking newsletter in your inbox every month. If you haven’t signed up for our newsletter, click the link in the show notes. You, David, for your incredible dedication to making this show happen each week, booking guests, doing the research and reading and pitching and believing people wanted a show about macroeconomics when others may have doubted you. Thank you, David.

Beckworth: Thanks. Let me just throw out some things as well. As I mentioned, I appreciate your work, the rest of the podcast team, Mercatus supporting me. I want to especially send out big thanks to the fans of the show. People who listen, continue to listen. Just it really is food for my soul when I meet you out there. I’ve had people come up to me and tell me they listen to the show. Just recently, we’ve had several guests who have listened over the years, became grad students, became professors or economists.

We recently had Zachary Mazlish, who’s at Oxford, and he came on the show and he’s been listening many years. We had Marijn Bolhuis, who’s an economist at IMF, and he’s been a longtime listener. This is just two examples of people who’ve listened a long time. I was at a conference this week and I was talking to Chris Waller, Jim Bullard, and a student comes up, interrupts us and says, “Hey, David Beckworth, I just want to let you know that you’re the reason I’m an econ major now, the podcast.”

It really makes me feel great to see these young people inspired. They’re the next generation. They’re the ones who are going to be setting monetary policy in the future. Whatever small role I can play in helping them, as well as helping the seasoned pros who are at central banks, who are at newspapers, who are in academia to think about these issues. I just thank you for giving me your time, one hour a week, and let’s continue this journey together.

Alburger: Absolutely, David. It’s been an incredible year, and thank you so much to everybody who listens to Macro Musings, taking time out of your busy week to listen and learn along with us. This show would not happen without your listenership, and we are so grateful for that and so grateful for the team that puts this show together. Thank you, David. I hope each and every one of you has a happy new year.

Beckworth: Happy new year.

Macro Musings is produced by the Mercatus Center at George Mason University. Dive deeper into our research at mercatus.org/monetarypolicy. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other thoughtful people like you find the show. Find me on Twitter @DavidBeckworth and follow the show @Macro_Musings.