Brookings Podcast on Economic Activity

Fiscal deficit projections are used by policymakers to understand the trajectory of U.S. debt. Between 1984 and 2003, Congress was responsive to these projections, raising taxes and cutting spending when projections showed that the deficit would grow. However, since 2004, fiscal policy has ceased being responsive to debt projections regardless of the party in power. In a new paper, “Robust Fiscal Stabilization,” Alan Auerbach and Danny Yagan of the University of California, Berkeley, quantify this phenomenon by comparing fiscal legislation across the two periods. On this episode, Auerbach discusses the findings and their implications with Brookings Senior Fellow William Gale.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

When Congress considers legislation, nonpartisan agencies provide estimates of the law’s potential economic effects to policymakers, a process known as “scoring.” In recent decades, analysts at the Congressional Budget Office and Joint Committee on Taxation have developed models that incorporate complex feedback effects, going beyond conventional scoring techniques. These “dynamic scoring” methods can produce significantly different estimates of a law’s economic impact, but there are tradeoffs in applying them in different policy areas. On this episode Doug Elmendorf and Glenn Hubbard join Wendy Edelberg, director of The Hamilton Project, for a discussion on the costs and benefits of dynamic scoring.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Since 2022, Western nations have put a number of sanctions on Russia in response to its war in Ukraine. Policymakers and pundits have debated the efficacy of these measures, but this debate is belied by a deeper question: what does it mean for sanctions to “work”? In new BPEA research, Oleg Itskhoki of Harvard and Elina Ribakova of the Peterson Institute for International Economics explore fundamental questions of the theory and practice of sanctions in the Russia context. On this episode of the Brookings Podcast on Economic Activity, Ben Harris, director of Economic Studies at Brookings, joins the authors for a discussion on what’s next for Russia and developing a doctrine of economic statecraft.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

The full-employment rate of unemployment may seem like a contradiction, but in fact, economists have long understood that some unemployment is necessary. In their new paper, Pascal Michaillat of UC Santa Cruz and Saez of the University of California, Berkeley present a new formula for identifying the efficient rate of unemployment in the U.S. and find that the labor market has been inefficiently slack for most of the last century. In this episode, Michaillat discusses the paper and potential impacts on macroeconomic theory and policy with Brookings Senior Fellow Louise Sheiner.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

As COVID-19 swept across the globe, many nations struggled to define a cohesive public health strategy to prevent the spread of the disease. However, in spite of the lack of a clear plan, improvised strategies of behavioral changes—e.g., masking, social distancing—slowed transmission until a vaccine could be developed. The new BPEA paper, “The impact of vaccines and behaviors on U.S. cumulative deaths from COVID-19,” estimates that the ad hoc strategy prevented close to 800,000 deaths. On this episode, epidemiologist and paper co-author Stephen Kissler talks with Brookings Senior Fellow Carol Graham about the model they used to study COVID-19's impacts and what can be done to improve the government response to future pandemics.  

This is the final episode of season four of the podcast.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

The failure of three mid-sized banks in March 2023—three of the four largest bank failures in history—shook financial markets and could’ve spread to other banks if regulators hadn’t stepped in. Two on-going trends in finance contributed to these failures: an increase in uninsured deposits and the migration of business lending to non-banks. In a new paper, “The evolution of banking in the 21st century,” a group of Harvard researchers looked at regulations that could mitigate risks going forward as well as the potential implications for mergers and acquisitions among mid-sized banks. David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy, hears from two of the authors, Samuel Hanson and Daniel Tarullo, on their findings in this episode of the Brookings Podcast on Economic Activity.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Most advanced economies enjoyed a long period of low, stable inflation prior to 2021, with inflation in the U.S. actually running below the Federal Reserve’s 2% inflation target for much of the 2010s. This stability was driven in part by factors external to monetary policy, including downward price and wage pressures from globalization and de-unionization. However, the authors of a new BPEA paper, “Changing central bank pressures and inflation,” argue that emerging trends may present headwinds to central banks trying to keep inflation steady. On this episode of the Brookings Podcast on Economic Activity, paper co-author Pierre Yared of Columbia Business School speaks with Brookings Senior Fellow Don Kohn about the new research and its implications for policymakers.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Many indicators suggest that the U.S. economy is thriving, yet Americans continue to have a negative overall economic outlook. Stubbornly high inflation has played a significant role in this negative sentiment among consumers, even as wage growth has caught up with the rate of inflation. In a new study, “Why do we dislike inflation?” Stefanie Stantcheva fielded a survey to explore how Americans experience inflation and why they have such strong feelings about it. In this episode of the Brookings Podcast on Economic Activity, Stantcheva discusses her findings with Economic Studies Vice President and Director Ben Harris.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

In the mid-20th century, U.S. states experienced recessions very differently from one another, which resulted in many workers migrating between states in search of work. But a newly developed dataset shows that economic recoveries have begun to look very similar across states in recent decades. On this episode, Senior Fellow Louise Sheiner talks with Andrew Fieldhouse and David Munro, authors of a new BPEA study that produced this dataset, “The emergence of a uniform business cycle in the United States.” Their conversation with Sheiner explores the reasons behind the convergence in recession recovery and the policy implications. 

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Many countries have faced harrowing debt burdens, and reducing the national debt is usually a lasting challenge. But in just five years, the Jamaica reduced its debt-to-GDP ratio by 40 percentage points, something only a handful of other countries have done in that time frame. On this episode of the BPEA podcast, Peter Blair Henry of Stanford and UC Berkeley's Barry Eichengreen join Brookings Senior Fellow Gian Maria Milesi-Ferretti to discuss their new BPEA paper on the unique factors that enabled Jamaica’s success.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

The COVID-19 pandemic shone a spotlight on supply chains, with shortages in everything from baby formula to microchips. This spurred an on-going policy debate on the need for the U.S. to shore up its supply chains, in some cases literally moving production back to the U.S. or allied nations. However, new analysis published in the Brookings Papers on Economic Activity showed that effort may be more difficult than standard supply chain data suggests, especially when it comes to limiting exposure to China. In this episode, David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy, interviews Rebecca Freeman of the Bank of England and Angelos Theodorakopoulos of Aston University on the “hidden exposure” that is revealed in U.S. supply chains with their new data.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Economists have long debated the potential for rising wages and prices to push each other increasingly higher, driving inflation out of control—the so-called “wage-price spiral.” Concern about such a spiral has been high in the post-pandemic era, with inflation still running notably higher than the Federal Reserve’s 2% target. On this episode of the Brookings Podcast on Economic Activity, Martin Neil Baily of Brookings talks with the authors of a new BPEA paper on wage-price spirals, Guido Lorenzoni and Iván Werning. Their study, which developed a new model for this economic scenario, contends that because various factors drove price growth to outpace wages just after the pandemic, wages can increase faster than inflation, at least for a time, without necessarily spinning the economy out of control.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Predictably, the rate of new business formations and business expansions at the beginning of the pandemic plummeted. But, in two waves, applications for new businesses and expansions quickly recovered, countering several decades of decline in business dynamism. Surprising many economists, applications have remained much stronger than before the pandemic. On this episode of the Brookings Podcast on Economic Activity, Hamilton Project Director Wendy Edelberg talks with John Haltiwanger of the University of Maryland about his new paper documenting this trend, whether it is a fleeting anomaly or the new normal, and how policymakers can balance cooling the overheated economy with supporting young businesses.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

In an effort to quell post-pandemic inflation, the Federal Reserve raised short-term interest rates eleven times since March 2022, with the federal funds rate now at its highest in over 20 years. Historically, such interest rate hikes—or even the suggestion of hikes—has triggered financial crises in emerging markets and developing economies. But, so far, that hasn’t happened. In this episode of the Brookings Podcast on Economic Activity, Şebnem Kalemli-Özcan and Filiz Unsal discuss their new study, which examined how improved monetary policy credibility in these countries may have improved their resilience to American financial trends.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

After the Russian invasion of Ukraine, there was a heated debate in Germany about whether to embargo the import of Russian natural gas as a sanction against Russia’s aggression. Before Germany could act, Russian began cutting the flow of gas to Germany, eventually halting it entirely. On this episode of the Brookings Podcast on Economic Activity, Benjamin Moll and Georg Zachmann talk with Economic Studies Director Ben Harris about how Germany navigated this tense situation, as well as their prior work that helped spur the "Great German Gas Debate."

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

In their latest research in the Brookings Papers on Economic Activity, Anne Case and Angus Deaton show that life expectancy for adults without a BA has been on the decline for almost a decade. On this episode of the Brookings Podcast on Economic Activity, Case discusses the new findings with Carol Graham of Brookings. 

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

For over 50 years, the Brookings Papers on Economic Activity has published research on urgent public policy issues by some of the world’s leading economists. What has made it so successful, and how has it evolved over the years? On this special episode, the last of season 2, out-going BPEA coeditor and host of the Brookings Podcast on Economic Activity James Stock is joined by his coeditor of 8 years, Jan Eberly, and incoming coeditor Jón Steinsson for a discussion on the importance of BPEA in economic policy over the years, the evolution of economic methodologies and analysis, and the direction of BPEA in years to come.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

Labor force participation plummeted by more than 3 percentage points during the first two months of the COVID-19 pandemic in 2020, representing a decline of more than 8.2 million people. While about half of the drop was quickly regained, participation has stagnated at about 1 percentage point below its pre-pandemic level. On this episode of the Brookings Podcast on Economic Activity, Louise Sheiner, policy director at the Hutchins Center on Fiscal and Monetary Policy, interviews Lea Rendell of the University of Maryland, one of the coauthors of a new BPEA study that asks, simply, “Where are the missing workers?” Sheiner and Rendell discuss several possible explanations, including fear of COVID-19 and shifting work-life balance preferences.

Show notes and transcript

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

It is widely understood that the global economy has become increasingly interconnected over the last century, with especially rapid globalization trends for 20 years starting in the 1990s. That trend continued even through the COVID-19 pandemic, when countries were forced to close their doors and many supply chains were disrupted. However, new Brookings Papers on Economic Activity research by Pinelopi Goldberg and Tristan Reed uses trade, capital flow, and immigration to show that there has been a slowing in globalization beginning around 2015. In this conversation, recorded in March 2022, the authors joined Brookings Senior Fellow Gian Maria Milesi-Ferretti for a discussion on their findings and the outlook for globalization going forward.

Show notes and transcript: https://bit.ly/3MkYdnP

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].

The Inflation Reduction Act is the largest piece of climate legislation ever passed in the U.S. The bill's incentives will affect the entire energy sector, from producers of raw materials to end-use consumers. BPEA paper co-author Neil Mehrotra, assistant vice president and policy advisor at the Federal Reserve Bank of Minneapolis, speaks with Sanjay Patnaik about the bill's policy implications.

Show notes and transcript: https://bit.ly/40Be1GB

The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to [email protected].