PODCAST: "Hexapodia" is þe Key Insight! XXXVII: A Meta-Podcast on the Ezra Klein Show, Larry Summers Edition; or, The Inflation Outlook Again

Key Insights:

Not so much key insights, as key questions: (a) What are the teams? (b) 1920, 1948, 1951, 1974, or 1980? (c) Are there any true members of Team Transitory left? (d) Who is on Team The-Fed-Has-Got-This? (e) Who is on Team Hit-the-Economy-on-the-Head-with-a-Brick? (f) What inflation rate do we want to support economic reopening? (g) What inflation rate do we want to support the sectoral rebalancing—towards goods production, & towards the deliverator economy? (h) How would expected inflation get embedded in the labor market without strong unions and multi-year contracts? (i) How would expected inflation get embedded in the labor market without it first showing up in out-year bond market breakevens?

With Putin’s invasion-of-Ukraine supply shock, Summers’s position looks a lot stronger

Near the zero-lower-bound, there is a high option value to waiting to raise

That optionality still seems to us, for the moment, to be the major consideration

Thus it is too early to hit the economy on the head with a brick—even the small 5%-interest-rates brick

But it is not too early for Jay Powell to furrow his brow and say that the Fed is considering Larry Summers’s arguments very carefully.

Noah Smith finds that he is much more in accord with Larry Summers than he thought he would be.

Larry and Ezra like Brad’s forthcoming Slouching Towards Utopia

Elon Musk should take over Twitter

Hexapodia!

Charts:

References:

J. Bradford DeLong (2022): Slouching Towards Utopia: An Economic History of the 20th Century (New York: Basic Books, 978-0465019595) <https://www.amazon.com/Economic-History-Twentieth-Century/dp/0465019595/ref=sr_1_1?crid=3U3XCUXOZ37HW>

J. Bradford DeLong: America’s Macroeconomic Outlook

Ezra Klein & Larry Summers: I Keep Hoping Larry Summers Is Wrong: What If He Isn’t?: The Ezra Klein Show <https://www.nytimes.com/column/ezra-klein-podcast>

Paul Krugman: High Inflation in the United States: Newsletter 2022-03-29 <https://messaging-custom-newsletters.nytimes.com/template/oakv2?CCPAOptOut=true&emc=edit_pk_20220329&instance_id=57038&nl=paul-krugman>

John Scalzi: The Kaiju Preservation Society <https://www.amazon.com/Kaiju-Preservation-Society-John-Scalzi-ebook/dp/B0927B1P8L>

Noah Smith: When Will the Fed Drop the Hammer?

Neal Stephenson: Snow Crash <https://www.amazon.com/Snow-Crash-Novel-Neal-Stephenson-ebook/dp/B000FBJCJE>

+, of course:

Vernor Vinge: A Fire Upon the Deep <https://archive.org/details/fireupondeep00ving_0/mode/1up>

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