My latest Macro Musing podcast is with Bob Hetzel. Bob is a senior economist and research advisor at the Richmond Federal Reserve Bank where he has worked since 1975. He joined me to discuss the rise of monetarism and how Milton Friedman, his dissertation advisor, shaped his thinking on macroeconomics. Monetarism challenged the conventional Keynesian consensus in the 1970s and caused Keynesians to reformulate their views into a new doctrine called, "New Keynesianism." However, in the wake of the Great Recession, "Old Keynesianism" has made a comeback and Bob shares his thoughts on it.
Bob also holds that the standard explanations of the Great Recession - household deleveraging and the financial crisis - are lacking. He has argued in a published paper and in a book that poor Fed policy in 2008 turned what would have been an ordinary recession into the Great Recession. That is a remarkable view for a Fed economist! We discuss this view of the Great Recession.