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GM100: Central Banks in the Dark: Inflation, AI, and the Limits of Control ft. David Beckworth
Description
Today, we are joined by David Beckworth, Senior Research Fellow at the Mercatus Center and host of Macro Musings, for a deep dive into the biggest macro questions shaping markets right now. David explains why central banks struggle to respond to supply shocks, why inflation expectations are more fragile than policymakers admit, and how frameworks like nominal GDP targeting could offer a more robust path forward. We explore the collision between geopolitical shocks and AI-driven productivity, the hidden consequences of quantitative easing, and the growing tension between monetary policy and fiscal sustainability. From stablecoins and the future of the dollar to the Fed’s balance sheet and financial system plumbing, this episode unpacks the forces quietly reshaping the global economy, and why policymakers may be less in control than we think.
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Episode TimeStamps:
00:00 - Stablecoins, financial stability, and uncertain impact
01:00 - David Beckworth’s path into macroeconomics
05:43 - How central banks should respond to supply shocks
08:56 - Why policymakers struggle to separate supply vs demand
11:58 - Inflation expectations and post-COVID sensitivity
14:46 - Are central banks over-reliant on flawed inflation models?
18:49 - AI as a positive supply shock: hype vs reality
22:00 - Productivity booms, deflation, and policy c