Joseph Gagnon on the Trinity of COVID-era Inflation and the Upcoming Fed Framework Review

Macro Musings with David Beckworth

Joseph Gagnon is a senior fellow at the Peterson Institute for International Economics, a former senior Fed staffer, and a returning guest to the podcast. Joe rejoins David on Macro Musings to talk about the unholy trinity behind the COVID inflation surge and what history can teach us about the unusual inflation experience of that period. David and Joe also discuss the inflationary lessons from the Korean War, the Fed’s upcoming framework review, and much more.

Transcript for this week’s episode.

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Joseph’s PIIE profile

David Beckworth’s Twitter: @DavidBeckworth

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Related Links:

*What Caused the U.S. Pandemic-Era Inflation?* by Ben Bernanke and Olivier Blanchard

*Understanding U.S. Inflation During the COVID Era* by Laurence Ball, Daniel Leigh, and Prachi Mishra

Timestamps:

(00:00:00) – Intro

(00:02:46) – Predicting the Post-Pandemic Inflation Surge

(00:06:39) – Assessing the State of the Bond Market and Inflation Expectations After the Inflation Surge

(00:16:14) – What Caused the U.S. Pandemic-Era Inflation: Breaking Down the Literature

(00:23:45) – *The Trinity of COVID-Era Inflation in G7 Economies*

(00:32:55) – *Why Did Inflation Rise and Fall So Rapidly? Lessons from the Korean War*

(00:42:06) – Inflation, FAIT, and the Upcoming Fed Framework Review

(00:49:18) – Why Should the Fed Consider Nominal GDP Targeting?

(00:53:04) – Responding to the Measurement Issue Surrounding Nominal GDP

(00:57:40) – Outro