Marginal Revolution Podcast, my excellent conversations with Alex Tabarrok

[[{“value”:”Alex and I have started this, and today is the premiere of the first episode. Here is the audio, video, and transcript, as with CWT (which by the way will continue as usual). This episode covers the breakdown of monetary policy in the 1970s, and Alex and I have recorded a series of other episodes
The post Marginal Revolution Podcast, my excellent conversations with Alex Tabarrok appeared first on Marginal REVOLUTION.”}]]

Alex and I have started this, and today is the premiere of the first episode. Here is the audio, video, and transcript, as with CWT (which by the way will continue as usual). This episode covers the breakdown of monetary policy in the 1970s, and Alex and I have recorded a series of other episodes on the economics of the 1970s, among other topics.

Currently I think we have six (?) more episodes in the can. Unlike CWT, this won’t be released once every two weeks, rather every now and then Alex and I will do a batch and then release them as a set, sequentially in fairly close succession.

From the current episode here is an excerpt:

COWEN: Barbarous relic. Look, we had to get rid of the gold standard.

TABARROK: No, no, we did not.

COWEN: It’s not an accident that it collapsed.

TABARROK: No, no, no. It definitely wasn’t an accident. No, it was done on purpose. It was done on purpose so that the politicians could further stimulate the economy. You think about all of the things which were holding them back. One of them was this idea of prudence and frugality. Then the Keynesians come along and it’s like Chesterton’s Fence. They say, “Oh, what’s this fence doing here? We don’t need that.”

They didn’t understand what the fence was doing in the first place. The purpose of the fence was to hold back the political inclinations to spend more and to try and stimulate the economy to win reelection. You got rid of the prudence and frugality, and then you got rid of the gold standard, which was also holding them back. That was like the second fence, which was eliminated.

COWEN: Look, I don’t like the Keynesians, but Friedman for one, was very happy to see the gold standard go. Had we stayed on the gold standard, given subsequent volatility in the price of gold, there would’ve been phenomenal macroeconomic volatility. In fact, we would’ve just cut the tie anyway. It was never going to last.

There was this fundamental contradiction that Europe in particular relied on the US to keep on increasing the supply of dollars, because there was a dollar shortage over there, and it was their reserve currency. The other economies weren’t strong enough, and there was no euro. Yet at the same time, the dollar was to be convertible into gold.

In the short run, we solved that “problem” by just twisting the arms of them, especially the French, and saying, “We’re not actually going to let you convert your dollars into gold, and we’re going to keep on sending you dollars.” At some point, the French just said like, “No way.” They started converting and the thing collapsed. There was never a way to keep it going that I can see. Unless you just pose a lot of deflation on the global economy, which would’ve been worse than what we did.

TABARROK: No, the increase in the volatility of the price of gold, that was endogenous, that was caused by going off the gold standard.

COWEN: At first but later on it was China, other demands, right?

YouTube playlist:

https://www.youtube.com/playlist?list=PLS8aEHTqDvpJ53zCEodWf9B1CNCHCTITG

Apple podcasts:

https://podcasts.apple.com/us/podcast/the-marginal-revolution-podcast/id1769803965

Spotify:
https://open.spotify.com/show/25RgiYGeqsnBjAvAOtcJ3z?si=6cff899441e04113&nd=1&dlsi=9b527fcce2f64e21

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The post Marginal Revolution Podcast, my excellent conversations with Alex Tabarrok appeared first on Marginal REVOLUTION.

Economics, History