Follow the link for the full summary: https://markusacademy.substack.com/p/the-economic-and-social-implications

Explore the webinar series: https://markusacademy.substack.com/archive

On June 8, 2020, Lisa Cook joined the Princeton Bendheim Center for Finance to discuss the economic and social implications of racial disparities in the U.S., with a specific focus on research that examines how violence impacts innovation among black Americans.

Cook is a Professor of Economics and International Relations at Michigan State University and was previously a senior economist in President Obama's Council of Economic Advisers.

Download the slides here.*

● COVID-19 exposed many economic and societal fissures in America, and a common feature of these inequities—from health to wealth gaps to police violence—is systemic racism. There has been a lot of literature on the origins, channels, and implications of systemic racism, but it largely hasn't examined macro inputs and outcomes like innovation and GDP.

● Innovation is a key driver of the economy, contributing to 10% of GDP and, through business investment, driving 20% of GDP.

● In studies on innovation and violence, Cook and co-authors find that violence significantly diminishes innovation and economic activity with persistent effects. Lynchings affected patents of African Americans significantly, and segregation laws hurt the most valuable patents of African Americans—electrical patents.

● As a result of African Americans not being more engaged in the innovation process, we're losing 4.4% of GDP each year, compared to 2.7% for women not being more engaged in innovation. Cook outlines several policy prescriptions, including improving the STEM pipeline, addressing the racial wealth gap, and pursuing structural change to combat systemic racism.

Follow the link for the full summary: https://markusacademy.substack.com/p/the-covid-crisis-was-a-wake-up-call 

Explore the webinar series:https://markusacademy.substack.com/archive

On June 5, 2020, Darrell Duffie joined Markus' Academy to discuss redesigning the U.S. Treasury market after COVID-19. Duffie is a Professor of Finance at Stanford's Graduate School of Business.

In his presentation, Duffie argued that the current design of the U.S. Treasury market creates moral hazard. He outlined a new proposal for transitioning the market from one that runs through dealer balance sheets to one with broad central clearing.

Download the slides here.

● Duffie noted this is the fourth time in the last century that the Fed has had to intervene in the Treasury market. Ultimately, the Fed purchased $1 trillion of treasuries in only three weeks' time, followed by more purchases.

● The Treasury market failure resulted from overwhelmed dealers. Because the market is dealer-intermediated, dealer's balance sheets became over-stuffed. A pipeline effect overwhelmed dealers, even though they were performing their role and expanded intermediation.

● We can expect this market failure to happen again—and perhaps more often. U.S. debt-to-GDP is growing enormously, resulting in more Treasury securities that need to be mediated by the market.

● Duffie's proposal: Treasury market structure based on broad central clearing is preferable. Broad central clearing would 1) improve the safety of settlements in the market, 2) through netting of purchases against sales, reduce the amount of dealer balance sheet needed for a given volume of trade, and 3) allow for the possibility of all-to-all trade in the future.

Follow the link for the full summary:

https://markusacademy.substack.com/p/the-feds-longer-term-challenges-after

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On June 1, 2020, Bill Dudley joined Markus' Academy to discuss the IMF’s perspective on COVID-19. Dudley is a Senior Research Scholar at Princeton University’s Griswold Center for Economics Policy Studies and former President of the Federal Reserve Bank of New York.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[10:48] Four Longer-Term Issues for the Fed

[12:52] The Fed’s Balance Sheet

[23:10] Independence of Monetary Policy

[30:36] The Longer Run Macro Implications

[37:34] The Moral Hazard Problem

[43:20] Other Lessons of the Crisis

[46:59] Audience Q&A

Follow the link for the full summary:

https://markusacademy.substack.com/p/the-great-lockdown-through-the-global

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 29, 2020, Gita Gopinath joined Markus' Academy to discuss the IMF’s perspective on COVID-19. Gopinath is the Chief Economist of the International Monetary Fund (IMF) and a Professor of International Studies and Economics at Harvard University.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[19:48] Truly global crisis

[32:56] Common features of economic impact

[42:08] Financial markets: disconnect?

[45:31] Monetary and Fiscal Policy

[51:08] Next Steps

[55:05] Profound uncertainty about the recovery

[56:07] Policies for the re-opening phase

[1:02:20] Audience Q&A

Follow the link for the full summary:

https://markusacademy.substack.com/p/covid-19-and-the-global-economy

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 22, 2020, Lawrence H. Summers joined Markus' Academy for a webinar on reopening the economy after COVID-19. Summers is a Professor at Harvard’s Kennedy School of Government, a former U.S. Treasury Secretary, President Emeritus of Harvard University, and former Chief Economist at the World Bank.

Timestamps:

[2:05] How to accelerate vaccine invention?

[19:30] Testing

[27:48] How do great powers compete economically?

[40:23] 3 likely future scenarios of US-China relations

[49:39] Free market vs more government? 

[57:56] Speed of recovery and how to pay for current expenditures? 

[1:00:11] Macroeconomic points

[1:12:29] Should governments use COVID to push other agendas? 

[1:24:44] Are there dangers we are ignoring?

Follow the link for the full summary:

https://markusacademy.substack.com/p/covid-19-and-re-opening-the-economy

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 18, 2020, John Cochrane joined Markus' Academy for a webinar on reopening the economy after COVID-19. Cochrane is a Senior Fellow at the Hoover Institution at Stanford University and author of The Grumpy Economist blog.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[15:04] The dumb reopening

[22:06] Behavioral SIR models

[30:08] Models miss heterogeneity

[33:51] Testing

[42:39] Summer/Fall

[45:27] Policy

[46:44] Macro/finance policy

[58:33] Legacy

[1:04:22] Audience Q&A

Follow the link for the full summary:

https://markusacademy.substack.com/p/the-audacity-of-slope-how-fast-a

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 15, 2020, Paul Krugman joined Markus' Academy for a webinar on COVID-19 and the pace of economic recovery. 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.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[13:06] Beginning of Krugman’s presentation

[17:32] Discussion of two recent papers

[19:26] Dynamics coming from labor market search

[28:12] Fed action has contained financial spillover

[34:17] Fast recoveries followed severe monetary tightening; slow followed slumps caused by private sector excesses

[39:20] Slow recoveries followed periods of unsustainable spending, ending in Minsky/Wile E. Coyote ending

[46:19] How does this apply to COVID-19 shock? 

[52:37] Bond market seems to be predicting slow recovery, but has been wrong in the past

[1:08:07] Audience Q&A

Follow the link for the full summary:

https://markusacademy.substack.com/p/an-evaluation-of-the-fed-treasury

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 11, 2020, Jeremy Stein joined Markus' Academy for a webinar, co-hosted by the Princeton Bendheim Center for Finance and the Society for Financial Studies, on the COVID-19 credit programs recently implemented by the Federal Reserve and the U.S. Treasury. Stein is a Professor of Economics at Harvard University and a former member of the Board of Governors of the Federal Reserve.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[16:43] Stein’ presentation begins

[18:14] Why support businesses in the first place?

[24:54] Mnuchin as Bagehot?

[28:53] High-level policy goals: micro and macro

[39:08] Existing program overview

[41:41] Public firm coverage

[47:52] Main Street programs in more detail

[54:25] Hardness of debt claims is a particular worry

[59:40] How to think about the staged-finance aspect

[1:02:41] Summary

[1:05:08] Audience Q&A

Follow the link for the full summary:

https://markusacademy.substack.com/p/the-benefits-of-targeted-policies

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 8, 2020, Daron Acemoglu joined Markus' Academy for a webinar on his paper on the benefits of targeted policies for lifting lockdowns and recovering from COVID-19 (Acemoglu et al., 2020). Acemoglu is a Professor of Economics at MIT.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[7:58] Beginning of Acemoglu’s presentation

[8:45] Background

[9:47] Varieties of heterogeneity

[12:12] What we do

[12:43] Summary of main findings

[16:53] Key equations

[25:13] Parameter choices

[28:18] Optimal uniform policy

[31:36] Optimal semi-targeted policy

[34:26] Optimal fully-targeted policy

[35:28] The Pareto frontier

[37:57] With greater value of life, another interesting contrast

[42:09] Bigger gains with between-group distancing

[43:18] Even bigger gains with testing-tracing

[44:34] Conclusion

[45:20] Audience Q&A

Follow the link for the full summary:

https://markusacademy.substack.com/p/the-future-of-globalization-after

Link to sign up for the webinar series:

https://markusacademy.substack.com/

On May 4, 2020, Dani Rodrik joined Markus' Academy for a webinar on COVID-19. Rodrik is a Professor of International Political Economy at the Harvard Kennedy School.

Download the slides here.

Timestamps:

[0:00] Markus’ introduction

[13:34] Beginning of Rodrik presentation

[14:33] Economic overview

[22:55] Making a globalization

[28:37] Different economic globalizations in history

[32:55] The globalization backlash under the gold standard

[34:17] Why global rules? 

[36:01] Almost all policies have cross-border spillovers

[42:08] The limited case for global rules in economics

[50:39] Implications for the kind of globalization we should want

[56:29] Applying the logic to US-China trade

[1:00:31] The four buckets approach

[1:14:52] Conclusion