Markus' Academy

MarkusAcademy

Princeton University's Markus Brunnermeier hosts conversations with leading academics and policymakers on the global economy, global politics, and artificial intelligence.

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110 episodes
Updated Saturday

Episodes110

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July 21 · 1 hr 17 min
Russia Sanctions: Diving into the Details | Markus' Academy | Ep. 90
Follow the link for the full summary: https://markusacademy.substack.com/p/russia-sanctions-diving-into-the Link to sign up for the webinar series: https://markusacademy.substack.com/ On April 14, 2022, Elina Ribakova joined Markus’ Academy for a lecture on Russia's sanctions. Ribakova is the Deputy Chief Economist at the Institute of International Finance. Download the slides here. Timestamps[0:00] Introductory remarks[11:26] Overview of Russian sanctions[22:09] A recent history of Russian financial sanctions[30:51] Russia’s 2014 response[36:17] Current strength of the ruble[48:15] Countries reliant on Russian oil[57:46] Impact of oil on Russian budget[1:10:37] Going forward: counter sanctions, possible solutions
July 21 · 1 hr 30 min
What if Germany is Cut Off from Russian Gas? | Markus' Academy | Ep. 89
Follow the link for the full summary: https://markusacademy.substack.com/p/what-if-germany-is-cut-off-from-russian Link to sign up for the webinar series: https://markusacademy.substack.com/ On April 7, 2022, David Baqaee and Ben Moll joined Markus’ Academy for to discuss their paper on cutting Germany off from Russian oil and gas. Baqaee is an assistant professor of economics at UCLA, a research affiliate of the CEPR, and a Faculty Research Fellow at the NBER. Moll is a professor of economics at London School of Economics and Political Science. Download the slides here. Timestamps:[0:00] Introductory remarks[16:16] Goals of the research[20:37] German energy shock[38:36] Keys to basic macro modeling[50:16] Richer models with supply chains and international trade[1:04:46] Order of Magnitudes calculation[1:15:41] Other missing effects?[1:28:06] Policy recommendations
July 21 · 1 hr 22 min
QE: What have we learned? | Markus' Academy | Ep. 88
Follow the link for the full summary: https://markusacademy.substack.com/p/qe-what-have-we-learned Link to sign up for the webinar series: https://markusacademy.substack.com/ On March 24, 2022, Arvind Krishnamurthy joined Markus’ Academy for a talk on QE. Krishnamurthy is a Professor of Finance at the Stanford Graduate School of Business. Download the slides here. Timestamps[0:00] Introductory Remarks. [13:46] Identification challenges in asset pricing event studies.[29:11] Cases: UK Gilt purchases[35:42] Cases: Fed reinvesting asset portfolio[39:12] More unconventional narrow-channel studies[49:58] Asset pricing theory with narrow channels[1:00:19] Conventional macro effects[1:11:52] Further modeling, policy implications, and research wishlist
July 21 · 1 hr 9 min
Sanctions, Energy Prices, and the Global Economy | Markus' Academy | Ep. 87
Follow the link for the full summary: https://markusacademy.substack.com/p/sanctions-energy-prices-and-the-global Link to sign up for the webinar series: https://markusacademy.substack.com/ On March 17, 2022, James Hamilton joined Markus’ Academy for a talk on Sanctions, Energy Prices and the Global Economy. Hamilton is the Robert F. Engle Professor of Economics at the University of California at San Diego. Download the slides here. For further materials, see Hamilton’s explanations on oil prices and inflation and oil sanctions and recessions. Timestamps: [0:00] Introductory Remarks:[13:10] Global and U.S. usage of crude oil and natural gas[26:01] Possibility of a recession?[41:05] Effect on consumers[44:03] Could this affect inflation?[52:30] Global implications.[1:00:29] Sanctions in Russia, additional questions.
July 21 · 1 hr 9 min
Investing in an Inflationary Environment | Markus' Academy | Ep. 86
Follow the link for the full summary: https://markusacademy.substack.com/p/investing-in-an-inflationary-environment Link to sign up for the webinar series: https://markusacademy.substack.com/ On March 10, 2022, Alexi Savov and Itamar Drechsler joined Markus’ Academy for a lecture on Investing in a High Inflation Environment. Savov is an Associate Professor of Finance at New York University’s Stern School of Business. Drechsler is the Ervin Miller-Arthur M. Freedman Professor of Finance and Co-Director of the Rodney L. White Center for Financial Research at the University of Pennsylvania, Wharton. Download the slides here. Timestamps:[0:00] Introductory Remarks[8:33] Asset and Inflation Theory 101[18:22] Why did stocks struggle during the Great Inflation?[27:12] Regulation Q[33:07] Credit Crunches and Stagflation[44:39] Credit Crunches and the Stock Market[48:20] Fears for now and future?[49:36] The Fed, Inflation, and the Fed Put
July 20 · 1 hr 2 min
Implications of Sanctions on the Russian Economy | Markus' Academy | Ep. 85
Follow the link for the full summary: https://markusacademy.substack.com/p/implications-of-sanctions-on-the Explore the webinar series:https://markusacademy.substack.com/archive On March 3, 2022, Sergei Guriev joined Markus' Academy for a lecture on the implications of sanctions on the Russian economy. Guriev is a Professor at Sciences Po and formerly the Chief Economist at the EBRD and Rector of Moscow's New Economic School. Download the slides here. Timestamps: [0:00] Markus' Introduction: objectives and effects of sanctions on Russia [11:36] Prior to the Ukraine War, the Russian economy exhibited slow growth but otherwise a robust macroeconomic environment [21:26] The sanctions following the annexation of Crimea in 2014 had a minor economic impact [23:34] Some sanctions were expected prior to the invasion of Ukraine, but Western sanctions went much further than expected [28:52] In the long-run, sanctions will substantially reduce economic performance through three channels [34:57] In the absence of further sanctions, revenue from oil exports will be sufficient to pay for imports and service sovereign debt [41:29] Politically, Putin's spin dictatorship is turning into a fear dictatorship [42:26] Open questions: cryptocurrencies, the role of China, and life without SWIFT
July 20 · 1 hr 18 min
Inflation Expectations | Markus Academy | Ep. 84
Follow the link for the full summary:https://markusacademy.substack.com/p/inflation-expectations Explore the webinar series:https://markusacademy.substack.com/archive On February 25, 2022, Yuriy Gorodnichenko joined Markus' Academy for a lecture on Inflation Expectations. Gorodnichenko is the inaugural Quantedge Presidential Chair in Economics at UC Berkeley. Download the slides here.* Timestamps:[0:00] Introductory remarks: anchored inflation expectations and strategic complementarities[8:30] Role of inflation expectations over time[16:34] How do we measure inflation expectations?[29:55] Predicted economic activity[39:41] Forces driving inflation expectations[45:41] Much of the country remains poorly informed[1:07:53] Lessons for economists and policy implications
July 20 · 1 hr 14 min
Inflation Risks | Markus Academy | Ep. 83
Follow the link for the full summary:https://markusacademy.substack.com/p/inflation-risks Explore the webinar series:https://markusacademy.substack.com/archive On February 17, 2022, Ricardo Reis joined Markus' Academy for a lecture on Inflation Risks. Reis is the A.W. Phillips Professor of Economics at the London School of Economics. Download the slides here.* Timestamps:[0:00] Markus' Introduction: inflation expectations involve wage bargaining and price setting[9:32] The last 20 years have been a very successful inflation controlling monetary regime[14:55] The initial response to the pandemic was very successful, but the upside risk came in late 2021, and now we must orchestrate a soft landing[27:55] Great risk of a new inflation regime in the U.S., many different possibilities[48:37] Possibility of a deflation trap in the Euro area[55:48] Benefits of keeping the inflation regime and price stability
July 20 · 1 hr 12 min
Landings Hard and Soft: The Fed, 1965-2020 | Markus Academy | Ep. 82
Follow the link for the full summary:https://markusacademy.substack.com/p/landings-hard-and-soft-the-fed-1965 Explore the webinar series:https://markusacademy.substack.com/archive On February 11, 2022, Alan Blinder joined Markus' Academy for a talk on his book A Monetary and Fiscal History of the United States. Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University, a regular columnist for The Wall Street Journal, and a former vice chairman of the Federal Reserve. Download the slides here.* Timestamps:[0:00] Soft landings encompass many factors[16:39] Understanding the history requires looking at different metrics to evaluate whether the landing was successful[21:22] Many of the landings were successful, though very different events went on behind the scenes[42:30] The perfect soft landing was from the end of 1993 to April 1995[51:59] Orchestrating a soft landing has challenges, but it is not impossible
July 20 · 1 hr 10 min
Financial Inclusion in the U.S. | Markus Academy | Ep. 81
Follow the link for the full summary:https://markusacademy.substack.com/p/financial-inclusion-in-the-us Explore the webinar series:https://markusacademy.substack.com/archive On January 27, 2022, Motohiro Yogo joined Markus' Academy for a talk on his recent paper Financial Inclusion Across the US. Motohiro Yogo is a Professor of Economics at Princeton University, a research associate of the NBER, a co-director of the NBER Insurance Working Group, and a research consultant at the Federal Reserve Bank of Minneapolis. Timestamps:[0:00] Markus' Introduction[5:54] Usage of big data[20:07] Financial participation[27:00] Any time trends?[43:58] Any geographic disparities?[1:03:02] What can be done?
July 20 · 1 hr 9 min
Krugman-Summers Inflation Debate: Part 2 | Markus Academy | Ep. 80
Follow the link for the full summary:https://markusacademy.substack.com/p/a-krugman-summers-inflation-debate-990 Explore the webinar series:https://markusacademy.substack.com/archive On January 21, 2022, Paul R. Krugman and Lawrence H. Summers joined Markus' Academy for another debate on inflation. Krugman is Professor Emeritus at Princeton University, the Distinguished Professor of Economics at the Graduate Center of the City University of New York, a columnist at the New York Times, and a 2008 recipient of the Nobel Prize in Economics. Summers is a Professor and President Emeritus of Harvard University, a former U.S. Treasury Secretary, and former Chief Economist at the World Bank.
July 20 · 1 hr 20 min
Central Banking | Markus Academy | Ep. 79
Follow the link for the full summary:https://markusacademy.substack.com/p/central-banking Explore the webinar series:https://markusacademy.substack.com/archive On January 14, 2022, Lord Mervyn King joined Markus' Academy for a lecture. King is a Professor of Economics and Law at NYU Stern School of Business and NYU Law. He has also served as Governor of the Bank of England and Chairman of its Monetary Policy Committee, as well as Deputy Governor, Chief Economist, Executive Director, and a non-executive director of the bank. Timestamps:[0:00] Inflation is on the rise: how can there be a soft landing?[24:36] What do you see as the role of models and the reaction functions of the central bank?[31:11] How did inflation targeting begin, and how has it functioned?[47:44] What are some of the limits of inflation targeting?[53:11] From current events, what is in store for the future of central bank balance sheets?[1:07:46] The role of central bank independence[1:12:33] Central bank digital currency
July 20 · 1 hr 11 min
Rethinking Multilateralism | Markus Academy | Ep. 78
Follow the link for the full summary:https://markusacademy.substack.com/p/rethinking-multilateralism Explore the webinar series:https://markusacademy.substack.com/archive On December 23, 2021, Lawrence H. Summers joined Markus' Academy for a lecture. Summers is the Charles W. Eliot University Professor and President Emeritus of Harvard University. During the past three decades, he has served in a series of senior policy positions in Washington, D.C., including the 71st Secretary of the Treasury for President Clinton, Director of the National Economic Council for President Obama, and Vice President of Development Economics and Chief Economist of the World Bank. ● Global security increasingly depends on managing cross-border risks and global public goods — pandemics, climate, technological externalities, and African development — rather than only deterring traditional military aggression. ● Global capital markets exhibit excess saving relative to financeable private projects, implying a large role for revamped development banking and multilateral institutions to intermediate resources toward high-social-return global public goods. ● International financial institutions must be replenished, re-levered, and structurally reoriented toward higher lending volumes, superior-enforcement-based resource generation, private co-financing, and direct financing of climate, health, and other global public goods. ● Climate policy effectiveness hinges less on high carbon prices and more on large-scale innovation and technology forcing, complemented by disciplined industrial policy, with spillovers to emerging markets via diffusion and appropriately managed intellectual property. Timestamps:[0:00] Markus' introduction[9:38] Security requires global coordination[12:08] Global savings is not channeled to the right place[14:51] Rethink development banking system to fund global public goods[21:35] Replenishing official financial institutions[25:48] Implementation of international architecture[37:58] Belt and Road Initiative[44:13] Extend debt repayment enforcement technology[49:00] Financial stability and debt restructuring[54:24] US monetary policy spillover effects[1:03:00] Pollution, carbon taxes, and innovation
July 20 · 38 min
Finance, Money and Climate Change | Markus Academy | Ep. 77
Follow the link for the full summary:https://markusacademy.substack.com/p/finance-money-and-climate-change Explore the webinar series:https://markusacademy.substack.com/archive On December 10, 2021, Markus Brunnermeier gave a talk on Finance, Money and Climate Change. Markus is the host of Markus' Academy and the Director of the Bendheim Center for Finance. Download the slides here.* Timestamps:[0:00] The greening of general policies[5:44] Tragedy of horizons[8:15] Green finance and the risks associated with pollution[13:40] Risk premia as an inefficient "Pigouvian tax"[16:26] Time inconsistency and risk premia[20:10] Distorting the labor/capital ratio and ESG ratings[24:53] Green monetary policy[30:00] Monetary policy instruments for green investment[31:31] Green monetary policy and central bank independence
July 20 · 1 hr 5 min
The Survival of the City | Markus Academy | Ep. 76
Follow the link for the full summary:https://markusacademy.substack.com/p/the-survival-of-the-city Explore the webinar series:https://markusacademy.substack.com/archive On October 28, 2021, Ed Glaeser joined Markus' Academy to discuss his recent book, The Survival of the City. Glaeser is the Fred and Eleanor Glimp Professor of Economics and the Chair of the Department of Economics at Harvard University. He has served as Director of the Taubman Center for State and Local Government, and Director of the Rappaport Institute for Greater Boston. Download the slides here.* Timestamps:[0:00] Markus' Introduction[8:56] Cities often do amazing things, but density can cause problems, especially when it comes to the spread of disease[15:04] For most of the last seven centuries, cities have been more resilient to disease[19:38] In early 2020, the Covid-19 crisis began mainly in urban areas and connected cities[29:57] Regulation can be a key factor in affordability[35:34] The lack of social mobility caused problems during the Covid pandemic[37:48] The pandemic will affect industries differently[45:35] Remote work may cause greater inequality[46:51] The future of cities depends on medical response
July 20 · 1 hr 3 min
In Defense of Public Debt | Markus Academy | Ep. 75
Follow the link for the full summary: https://markusacademy.substack.com/p/in-defense-of-public-debt Explore the webinar series: https://markusacademy.substack.com/archive On October 7, 2021, Barry Eichengreen joined Markus' Academy for a talk on his recent book, In Defense of Public Debt. Eichengreen is the George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at UC Berkeley. Timestamps: [0:00] Markus' Introduction [10:00] Recent years have seen shifts in views of public debt [16:59] The history of deficit spending for crisis management is extensive [30:29] With the Covid-19 crisis, a war-like response was necessary [34:45] Throughout the 19th century in countries such as the U.S., the U.K., and France, fears of future wars brought the debt-to-GDP ratios down, preparing for going into further debt later [50:33] Today, there are possibilities of crises that would be large enough to warrant a war-like response [52:36] The U.S. is able to borrow at favorable rates, but poor behavior may preclude this in the future if the dollar grows too volatile
July 20 · 1 hr 9 min
Experience with Monetary Policy in a Low r* World | Markus Academy | Ep. 74
Follow the link for the full summary: https://markusacademy.substack.com/p/experience-with-monetary-policy-in Explore the webinar series: https://markusacademy.substack.com/archive On September 30, 2021, Charles Evans joined Markus' Academy for a lecture on monetary policy in a low r* world. Evans is the President and Chief Executive Officer of the Federal Reserve Bank of Chicago. Timestamps: [1:35] Inflation persistence versus transitory effects [13:56] Monitoring changes in inflation expectations [23:19] Is the Phillips curve relatively flat until the inflation anchor breaks? [34:07] Flexible average inflation targeting (FAIT) and FOMC discretion [46:08] How to think about r* over the cycle [53:31] Are the DOTS valuable or misleading? [57:09] Interest on reserves [59:37] FAIT international implications [1:01:53] Fiscal and financial constraints on future tightening
July 20 · 1 hr 20 min
COVID Lessons from India for Emerging Economies | Markus Academy | Ep. 73
Follow the link for the full summary:https://markusacademy.substack.com/p/covid-lessons-from-india-for-emerging Explore the webinar series:https://markusacademy.substack.com/archive On July 1, 2021, Viral Acharya joined Markus' Academy for a lecture on COVID lessons from India for other emerging economies. Acharya is the C.V. Starr Professor of Economics in the Department of Finance at New York University Stern School of Business and an Academic Advisor to the Federal Reserve Banks of New York and Philadelphia. Download the slides here.* Timestamps:[0:33] Vaccine production and distribution challenges for emerging and developing economies[3:29] Distributing resources such as vaccines and oxygen[18:32] Lessons from the Spanish flu of 1918[23:19] Key measures in the coronavirus response[30:25] Flattening the curve and hospital bed capacity[43:07] Calibrating models with disease-specific data[50:02] Dynamics of deaths and undercounts in India[1:00:17] Implications of overflow and death undercount[1:07:09] Robust policy planning under uncertainty
July 20 · 1 hr 16 min
The Power of Creative Destruction | Markus Academy | Ep. 72
Follow the link for the full summary: https://markusacademy.substack.com/p/the-power-of-creative-destruction Explore the webinar series: https://markusacademy.substack.com/archive On June 24, 2021, Philippe Aghion joined Markus' Academy for a talk on his book "The Power of Creative Destruction," discussing the lessons of COVID for rethinking capitalism. Aghion is a Professor at the College de France and at the London School of Economics, and a fellow of the Econometric Society and of the American Academy of Arts and Sciences. Download the slides here.* Timestamps: [0:00] Creative destruction and the Schumpeterian growth paradigm [13:34] Historical enigmas revisited through the lens of creative destruction [14:03] Industrial take offs and the role of institutions [19:05] Secular stagnation and the rise of superstar firms [25:32] The middle income trap [28:02] The sources and dynamics of inequality [37:27] Questioning the wisdom of taxing robots [43:47] Taxation, innovation, and inclusive growth [48:07] Protectionism versus innovation for regaining value chain leadership [1:00:40] Green innovation as the response to climate change [1:05:28] Rethinking capitalism with COVID as a revelator of the broken social model
July 20 · 1 hr 15 min
COVID Inflation: Evidence from Real-Time Data | Markus Academy | Ep. 71
Follow the link for the full summary: https://markusacademy.substack.com/p/covid-inflation-evidence-from-real Explore the webinar series: https://markusacademy.substack.com/archive On June 17, 2021, Alberto Cavallo joined Markus' Academy for a lecture. Cavallo is the Edgerley Family Associate Professor at Harvard Business School, a Faculty Research Fellow at the National Bureau of Economic Research, and a member of the Technical Advisory Committee of the US Bureau of Labor Statistics. Download the slides here.* ● Online price indices have been produced in real-time since 2007, when Cavallo used web-scraping to expose manipulation of Argentina's official inflation data. Since 2010, PriceStats has been collecting daily online prices from over 1,000 large retailers, publishing real-time inflation data in 22 countries and sharing results with central banks, policymakers, and researchers. Historically, online prices have anticipated changes in US CPI inflation trends by 2-3 months. ● Online indices detected a significant increase in the US inflation trend as early as November 2020, with a stable trend at a 5% annualized inflation rate. Similar COVID "turning points" were seen in other countries, and annual inflation is now at its highest level in over a decade in almost all tracked economies. ● Measurement distortions with CPI weights are affecting the annual inflation rate by not accounting for COVID-driven changes in spending patterns. These distortions caused inflation inequality across income groups and added approximately 0.9% to the US annual inflation rate in May 2021. ● Supply disruptions caused by COVID led to a significant increase in stockouts and inflation for affected goods. Temporary stockouts peaked at around 23%, and product availability remains about 20% below pre-COVID levels in 2021. While disruptions appear temporary, the price effects will persist for a while and COVID's shift of transactions online will likely introduce additional volatility to the inflation rate.