News and Commentary
Mercatus Center’s Macro Musings podcast has a new episode interviewing Anat Admati of Stanford University. The host David Beckworth asks some insightful questions on Covid-19 and Admati explains why leverage mattes in the current economic crisis. Give it a listen or read the transcript here.
A new AEA paper looks at banking busts accompanying credit booms and suggests that macroprudential countercyclical policy could provide significant welfare gains. Such gains are obviously far higher if the policy can actually prevent a run on the bank during a credit boom.