Filippo Gaddo, SPE Councillor, held a discussion with Agathe Demarais, senior policy fellow at the European Council on Foreign Relations. Demarais is the author of “Backfire”, a book on the global ripple effects of sanctions and export controls and is a regular columnist for Foreign Policy and a frequent commentator for the media.

Geopolitics has risen to prominence in the news for a while and it is now influencing the way we look at international economics. Filippo and Agathe discuss what 'Geo-economics' is and what are the geopolitical trends that will affect the global economy in 2025 and beyond.

Agathe outline three pillars to understand Geoeconomics: the landscape - what are the big geopolitical trends around ‘fragmentation’ and the intersection of geopolitics and the macroeconomy; the strategy – what are the policies and the strategies implemented by countries to manage their relationship; and finally, the tools of economic statecraft, sanctions, tariffs, export controls. In particular – building on the work outlined in her book ‘Backfire’ – Agathe looks at the success or failure of previous episodes when sanctions and export controls where used and what we can learn from them.

The conversation also touches on the politics of the recently installed Trump administration and how Europe could and should respond to it. As Agathe mentioned, Geoeconomics will remain a buzzword throughout the year and so it is great to bring a framework to interpret it to the SPE audience.

Agathe Demarais is a senior policy fellow at the European Council on Foreign Relations. Her areas of interest include the global economy, geopolitics, and sanctions. She heads ECFR’s geoeconomics initiative and co-leads ECFR’s Re-Order project, exploring emerging visions of the global order, as well as the interplay between economic might and geopolitical influence.

Before joining ECFR, Demarais was the global forecasting director of the Economist Intelligence Unit (EIU), the research arm of The Economist. She led the EIU’s global economic and geopolitical analysis, with a particular focus on trade developments, emerging markets, and economic statecraft. Her essays have appeared in The Economist, The Times, Foreign Affairs, Politico, Le Grand Continent, the Journal of Democracy, and World Politics Review. Demarais holds master’s degrees from Sciences Po Paris and Columbia University, where she was a Fulbright scholar.

Filippo Gaddo, SPE Councillor, held a discussion with Gauti Eggertsson, Professor of Economics at Brown University Economics Department and a recognised international finance and macroeconomics author - most recently he presented a paper on the inflation surge of 2020s at the August Jackson Hole Fed conference. See paper here

In the opening interview of 2025, Filippo and Gauti reflect on the 'inflation surge' of early 2020s and its causes, dynamics and potential resolution. In particular, Gauti outlines his theory of a 'Slanted-L Phillips Curve' - whereby when the vacancy to employment ratio goes above a certain ratio [the Beveridge threshold] then the Phillips curve become very steep or almost vertical and any small movement in labour market can cause a large increase/decrease in inflation - which is what we saw when Covid provided first a supply shock and than, through government response, a demand shock to the system. Whilst the reading of the causes of the inflation surge may be different from that of other previous guests on the podcast, Gauti agrees that the government response in 2021 was probably too much and too late, and the reaction of monetary authorities was potentially slow.

The discussion also highlights the role of inflation expectations and how they interacted with the labour market in moderating and reducing inflation in 2023 and 2024. Filippo and Gauti finally share some thoughts on the incoming Trump administration and what we may expect in terms of impact from trade, tariffs and fiscal policies - and Greenland also gets a mention!

A great conversation to start the new year.

Gauti B. Eggertsson is a macroeconomist and a Professor of Economics at Brown University Economics Department. He received his Ph.D. in Economics from Princeton University in 2004, after having completed his B.S. in economics from the University of Iceland.

He has worked at Research Departments of the International Monetary Fund and the Federal Reserve Bank of New York. Since graduation he has also been visiting faculty at Princeton, Yale, and Columbia where he taught international finance and macroeconomics at both graduate and undergraduate level.

Eggertsson has published in a variety of professional journals such as the American Economic Review, American Economic Journal: Macroeconomics, American Economic Review: Insights, Brookings Papers on Economics Activity, Economic Journal, Journal of Monetary Economics, Journal of Money, Credit and Banking, Review of Economic Studies, Review of Economic Dynamics and the Quarterly Journal of Economics.

The main focus of his work is the analysis of monetary and fiscal policy over the business cycle, both from a modern and historical perspective.

Filippo Gaddo, SPE Councillor, held a discussion with Adam Posen, President of the Peterson Institute for International Economics and former Bank of England's MPC member. Adam is a regular contributor to leading news and policy publications, including the Financial Times, Foreign Affairs, New York Times, Wall Street Journal, Washington Post, and Harvard Business Review and you can follow his writing on the PIIE website https://www.piie.com/experts/senior-research-staff/adam-s-posen or on X at https://x.com/adamposen.

In this final interview for 2024, Filippo and Adam delve deep into the very topical debate of trade policy and tariffs and the wider implications of US economic policy of the incoming Trump administration. Adam starts with an overview of the current status of 'globalisation', highlighting the benefits that trade and globalisation itself have brought to the US and other developed nations' economies over the past thirty years and dispelling some of the more common myths about the perceived downsides. Filippo and Adam also go through the more traditional arguments put forward in favour of tariffs or industrial policies - national security, protection of manufacturing base, jobs losses avoidance, supply chains security for example - and the validity [if any] of such arguments. Adam then looks to the future and lays out a possible scenario for the 2025 US tariffs landscape - one that could affect Mexico and Canada very early on as much as China and Europe, with a mix of threats, offers, exemptions and even a possible renegotiation of existing deals such as USMCA. Adam cautions us all to take Trump's positions and pronouncements very seriously.

The conversation then ends on monetary policy where Adam's view is somewhat outside the broader consensus: because of Trump's potential inflationary policies the Fed may cut much less early in 2025 than expected and even end up raising rates later in the year. Only time will tell, but we do have something to look forward to - an economic rollercoaster of a year. A wonderful and rich discussion that sets us up well for the Christmas break and the new year.

Adam Posen is President of the Peterson Institute for International Economics since 2013 and over his career, he has contributed to research and public policy regarding monetary and fiscal policies in the G-20, the challenges of European integration since the adoption of the euro, China-US economic relations, and developing new approaches to financial recovery and stability.

He was one of the first economists to seriously address the political foundations of central bank independence and to analyze Japan's Great Recession as a failure of macroeconomic policy.

While at the Federal Reserve Bank of New York during 1994–97, he co authored 'Inflation Targeting: Lessons from the International Experience' with Ben Bernanke, Thomas Laubach, and Frederic Mishkin. Adam has been the recipient of major grants and research fellowships from the American Academy in Berlin, the Brookings Institution, the Bank of England, the European Commission, the Ford Foundation, the Sloan Foundation, and the US National Science Foundation. In November 2018, he gave the inaugural Adam Smith Distinguished Lecture at the University of Glasgow. In January 2019, he was named a CEPR Distinguished Fellow. He served seven terms as a member of the Panel of Economic Advisers to the U.S. Congressional Budget Office from 2005 to 2019.

Posen received his BA and PhD from Harvard University.

Filippo Gaddo, SPE Councillor, held a discussion with Tera Allas, Director of Research and Economics at McKinsey where she leads research on the macroeconomic outlook, growth, and productivity. Tera is also very active on social media and can be found frequently posting data and analysis at: https://www.linkedin.com/in/teraallas/

Tera starts the conversation describing her career outlining the differences - and similarities - of working in the public and private sector. Filippo and Tera then quickly pivot to the issue of productivity and the current status of the UK economy. It seems that both Tera and Filippo can't get 'productivity out of their heads' - it is indeed the most important factor that determines the future of a country's economic growth. In the discussion comparisons are drawn between the UK and the US and what may be behind the gap between the two countries: attitude to risk, level of investment, regulation all come back as key contributors. The topic of AI is also covered and in the end Tear and Filippo are somewhat optimistic about the future of productivity though with a lot of caution and pointing to potential pitfalls to avoid. It is a very data driven, rich conversation that both macro- and micro-economists will enjoy!

Tera is Director of Research and Economics in McKinsey’s United Kingdom and Ireland office. She leads McKinsey’s research on the macroeconomic outlook, growth, and productivity, bringing together deep expertise and more than three decades of experience in strategy, corporate finance, economics, and public policy. Tera serves as the chair of Pro Bono Economics and The Productivity Institute’s Advisory Committee, as a trustee of the Productivity Leadership Group (Be the Business), and as a governor of the National Institute of Economic and Social Research.

Tera holds an Honorary Professorship at the Alliance Manchester Business School and is a Fellow of the Academy of Social Sciences and a Fellow of the Royal Society for the Encouragement of Arts, Manufactures and Commerce. Tera was previously on the board of Innovate UK, the United Kingdom’s national innovation agency. From 2004 to 2014, she worked as chief economist in the UK’s energy, transport and business departments and as deputy head of the UK Government Economic Service.

Tera was appointed Commander of the Order of the British Empire (CBE) for services to economic policy in the New Year Honours list 2019.

Filippo Gaddo, Managing Director at MAP and SPE member, held a discussion with John Cochrane, the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution. John writes extensively on monetary and financial economics, the relationship between deficits and inflation, the effects of monetary policy, and the fiscal theory of the price level. He maintains the Grumpy Economist blog, and can be found at:

Cochrane earned a bachelor’s degree in physics at MIT and his PhD in economics at the University of California at Berkeley. He was a junior staff economist on the Council of Economic Advisers (1982–83).

John Cochrane frequently contributes editorial opinion essays to the Wall Street Journal, Bloomberg.com, and other publications. He maintains the Grumpy Economist blog and is a regular guest of the weekly Hoover Institution broadcast, ‘Goodfellows’.

Filippo Gaddo, Managing Director at MAP and SPE member, held a discussion with Dimitri Zenghelis, Senior Visiting Fellow at the London School of Economics and Special Advisor to the Wealth Economy project. Dimitri has written extensively on climate change and energy transition policy

In the interview, Dimitri and Filippo discuss the current status of the energy transition and the progress made by climate policy and the decarbonisation of the energy sector. Dimitri argues that the ‘genie is out of the bottle’ and that decarbonisation of electricity for sure but more broadly of the energy sector is inevitable, as the cost of production for renewable energy technologies has significantly fallen over the past decade or so. Lots of progress needs still to happen of course, particularly in end use technologies and in networks. Does net zero add to productivity and growth? Yes, is the answer from Dimitri, but the question now is more about who will build and benefit from the manufacturing of net zero technologies. The UK is well positioned in this race but in danger of losing ground. The policies of the recently installed Labour government are promising in this regard. Filippo and Dimitri end the talk by discussing the Wealth Economy and different ways to measure growth and productivity.

Dimitri Zenghelis is Special Advisor to the Wealth Economy project, which he also co-founded, centred at Cambridge University. He is also a Senior Visiting Fellow at the London School of Economics. He was until recently Head of Policy at the Grantham Research Institute at the LSE and Acting Chief Economist for the Global Commission on the Economy and Climate. Previously, Dimitri headed the Stern Review Team at the Office of Climate Change, London, and was a lead author on the Stern Review on the Economics of Climate Change, commissioned by the then Chancellor Gordon Brown. He was also Senior Economic Advisor to Cisco's long-term innovation group and an Associate Fellow at the Royal Institute of International Affairs, Chatham House. Before working on climate change, Dimitri was Head of Economic Forecasting at HM Treasury.

Filippo Gaddo, Managing Director at MAP and SPE member, held a discussion with Spencer Dale, Chief Economist at BP and former Bank of England MPC Member.

In the interview, Spencer and Filippo discuss the outlook for the energy sector and the value of scenarios in mapping future outcomes and how they can help to support decision making.

The Energy Trilemma is alive and well, argues Spencer, and it was always so from the point of view of most developing and emerging economies; in more advanced economies it was Covid, the Russian invasion of Ukraine and the following energy crisis that reminded policymakers of how important energy security and affordability remain. However, we should not forget that the trajectory of carbon emissions reduction also matters: it is the overall amount of emissions under the curve that affect climate and so we should ensure all efforts continue to implement policies to both reduce energy demand and deploy technologies that meet such demand in the most efficient and low carbon way possible.

That balance between efforts on the demand versus supply side is the heart of the matter as pushing too hard for change [whether in cutting demand or in reducing the use of fossil fuels during the transition] may undermine the long-term goal by forcing unrealistic policies or targets.

In the end the solution is one that meet energy, technology but also socio-economic objectives.

It is a fascinating discussion on the future of energy from one of the foremost experts in the field.

Spencer Dale is BP chief economist since October 2014. Prior to that, Spencer was chief economist of the Bank of England and a member of the Monetary Policy Committee. He joined the Bank of England in 1989 and served in numerous roles, including private secretary to Mervyn King and head of economic forecasting.

Spencer served as a senior advisor at the US Federal Reserve Board of Governors between 2006 and 2008.

He was educated at the University of Wales, gaining a BSc in Economics in 1988 and at the University of Warwick, gaining an MSc in Economics in 1989, whereupon he immediately joined the Bank of England.

Filippo Gaddo, Managing Director at MAP and SPE member, held a discussion with Sam Bowman, founding editor of Works in Progress. He writes extensively on the UK economy and most recently he co-wrote with Ben Southwood and Samuel Hughes an essay on reasons why Britain stagnated – called Foundations.

In the interview, Sam and Filippo explores the reasons behind the relatively ‘poor’ performance of the UK economy over the past 15 years. In fact, Sam goes beyond the Great Financial Crisis in 2008 and provides an overview of UK growth over past two centuries and points to two other inflection points when the UK started to progressively lose ground against its peers: the late 1940s and the 1970s. The core of Sam’s argument is that the UK has a very high potential for growth – rooted in culture, institutions, language, geographical location – but it has stopped doing what is needed to fully leverage its good fundamentals: essentially, it stopped ‘building’ and when it does build, it is too expensive, due to overregulation, poor planning and to a certain extent the tendency to ‘gold-plating’ projects. Three sectors are highlighted in this context: housing, infrastructure and energy. Sam argues that by implementing some planning and regulatory reform and starting building, productivity and innovation can come back.

Sam Bowman is a founding editor of Works in Progress. Previously, he was director of competition policy at the ICLE, principal at Fingleton, and executive director of the Adam Smith Institute.

Filippo Gaddo, Managing Director at MAP and SPE

In the interview, Nick and Filippo discuss the fundamentals of growth as they relate to the labour market: demographics and fertility – the total number of people; labour participation rates – how many people work; retirement age – how long people work; and innovation – how people interact together to generate ideas, under the assumption that the more people

Nick outlines his research on the decline in the labour participation rate among prime-age men [between 25 and 54 years] in America and the rise of ‘labour dropouts’, the impact this has on the economy and on social issues. Some of the possible reasons explored in the talk for the decline in participation are the increase in disability claims and the high number in the US of ex-felons and their difficulty in finding stable employment.

Nick and Filippo also consider a more recent similar trend (essentially post-pandemic) emerging in prime-age women and over 55s (which have not fully come back to the workforce at the level before Covid19) - both of which will need further study. However, it is not all doom and gloom: in the conversation Nick points to areas for further research that could help explaining the dynamics behind such trends and also some possible policy solutions. 

Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute (AEI), where he researches and writes extensively on demographics and economic development generally, and more specifically on international security in the Korean peninsula and Asia.

Domestically, he focuses on poverty and social well-being. Dr. Eberstadt is also a senior adviser to the National Bureau of Asian Research (NBR).

His many books and monographs include “Poverty in China” (IDI, 1979); “The Tyranny of Numbers” (AEI Press, 1995); “The End of North Korea” (AEI Press, 1999); “The Poverty of the Poverty Rate” (AEI Press, 2008); and “Russia’s Peacetime Demographic Crisis” (NBR, 2010). His latest book is “Men Without Work: America’s Invisible Crisis” (Templeton Press, 2016).

Nicholas has a PhD in political economy and government, an MPA from the Kennedy School of Government, and an AB from Harvard University. In addition, he holds a master of science from the London School of Economics, and in 2012, he was awarded the prestigious Bradley Prize.

Filippo Gaddo, Managing Director at MAP and SPE member, held a discussion with David Beckworth, senior research fellow at the Mercatus Center at George Mason University whose research focuses on the targets, tools, operating system, and governance of the Federal Reserve. David is also the host of the widely known Macro Musings podcast.

In the interview, David and Filippo discuss the performance of the Fed during the recent inflationary cycle, why they were behind the curve and what to expect going forward. As part of the conversation about Fed’s decision making David outlines the current framework (FAIT), what were the novelties when it was introduced in 2020 and how it was in part developed in reaction to the pre-pandemic zero bound world - and so how it may be now out of date. The discussion then focused on the upcoming Fed framework review and what changes we should expect: Filippo and David explored Nominal GDP targeting and how it would lead to potential different outcomes in monetary policy. It is a very interesting option and one that has much to be recommended for – we may see papers on a practical implementation in forthcoming paper soon. In the meantime see link for more information: NDP Targeting

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The final part of the interview focused on David’s wonderful podcast series: Macro Musings now on its 458th episode. Since 2016, he has interviewed hundreds of experts, including regional presidents of the Federal Reserve, Nobel laureates, and leading academics from around the world. It is one of the longest running and most distinguished podcasts and it was good to get some insights from David about his experience and what he learned from guests. There is also a Chat Bot based on the interviews – it is fun to use so explore it at: Macro Musings Chat Bot

David Beckworth is a senior research fellow at the Mercatus Center at George Mason University and director of the Mercatus Center’s monetary policy program. His primary research focuses on the targets, tools, operating system, and governance of the Federal Reserve, has included work on the US Treasury market, the safe asset shortage, and dollar dominance, and he has been cited by the Wall Street Journal, Financial Times, New York Times, Bloomberg Businessweek, and the Economist. David is also the host of Macro Musings, a weekly podcast on macroeconomics.

Formerly an international economist at the US Department of the Treasury, he earned his PhD in economics from the University of Georgia.