How worried should we be about wage-price spirals?
Brookings Podcast on Economic Activity
Release Date: 12/07/2023
Why is spending on health care slowing?
Brookings Podcast on Economic Activity
In 2010, the U.S. government projected that Americans would spend about $6 trillion dollars on health care, a little over 21% of GDP, in 2024. The actual amount spent was almost $1 trillion less. In fact, health care spending has been below projections almost every year since the early 2010s. In a new BPEA paper, “Has the U.S. bent the health care cost curve?” David Cutler and Lev Klarnet of Harvard University document this historic slowdown in spending, identify causes, and offer insight into whether this slowdown is a permanent adjustment to the trend. On this episode of the Brookings...
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How long will China’s real estate crisis last?
Brookings Podcast on Economic Activity
China’s real estate sector and infrastructure account for nearly one-third of economic demand in China. Plus, Chinese households allocate far more of their wealth to housing (nearly 70%) than households in other countries. So with the country’s real estate sector entering its sixth year of adjustment, the implications for China and the rest of the world are growing. In a new BPEA paper, Kenneth Rogoff and Yuanchen Yang look for clues on what will happen next in another recent real estate crisis, that of 1990s Japan. On today’s episode of the Brookings Podcast on Economic Activity, Rogoff...
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How can the Fed reduce its balance sheet?
Brookings Podcast on Economic Activity
Since the Great Financial Crisis of 2008, the Federal Reserve has amassed roughly $6.6 trillion in assets, primarily in the form of Treasury securities and government-guaranteed mortgage-backed securities. Some, including President Trump’s nominee to be the next chair of the Federal Reserve Board, have suggested that the Fed should reduce the size of its balance sheet. On this episode of the Brookings Podcast on Economic Activity, Darrell Duffie of Stanford University discusses how the central bank could achieve that...
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Has the CHIPS Act created jobs?
Brookings Podcast on Economic Activity
The CHIPS and Science Act of 2022 included funds for billions of dollars in federal investments in U.S.-based manufacturing, a major landmark in the history of America’s industrial policy. While the full impacts of such a large bill will take years to reveal themselves, new research shows that firms have already responded to the CHIPS Act, with increases of roughly 15,000 new jobs in semiconductor production-related jobs attributable to the law. On this episode of the Brookings Podcast on Economic Activity, Bilge Erten, Joseph E. Stiglitz, and Eric Verhoogen, authors of the new study, join...
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Is the neutral rate of interest going to start climbing after years of decline?
Brookings Podcast on Economic Activity
Monetary and fiscal policymakers use a variety of metrics to inform their decisions, but among the most important is the neutral rate of interest, also known by economists as “r*,” a number that isn’t directly observable. It represents the prevailing rate of interest in a smooth-running economy, and can be thought of as a target for policymakers. A new study presents a model of r* showing its decline in recent decades, as well as some potential signs that it may start creeping back upward in the coming years. On this episode of the Brookings Podcast on Economic Activity, Brookings Senior...
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What jobs will be most affected by AI?
Brookings Podcast on Economic Activity
Throughout history, human work has been augmented by technology. But the emergence of artificial intelligence tools have led many to ask whether an unprecedented shift in how we work with technology is imminent. In a new study, researchers used modern AI tools to look back at the recent history of technology’s impact on work—which jobs were replaced, which were enhanced, and who was likely to benefit—and then used that model to look at the potential impacts of AI going forward. On this episode of the Brookings Podcast on Economic Activity, two of the study’s authors, Dimitris...
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Are fertility rates falling because of social comparisons?
Brookings Podcast on Economic Activity
Fertility rates are falling in many countries around the world, with births failing to keep pace with deaths in nearly half of countries. Researchers believe it’s possible that the world’s population will start shrinking in the near future, and the effects could be catastrophic for institutions like Social Security. A new paper explores a novel explanation for this decline in fertility: The role of social comparison between parents. On this episode of the Brookings Podcast on Economic Activity, David Wessel is joined by two of the authors to discuss the parental rat race, the high costs of...
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How much is climate change costing US households?
Brookings Podcast on Economic Activity
Studies of the economic impacts of climate change often look at long-term, national costs. A new BPEA study takes a different approach, focusing on the current household level costs attributable to changing weather. The report authors examine a range of impacts, from mortality costs due of wildfire smoke to rising insurance costs along coastlines, to provide estimates of annual costs by region and socioeconomic status. On this episode of the Brookings Podcast on Economic Activity, two of the authors, Kimberly Clausing and Catherine Wolfram, join host Samantha Gross for a discussion of their...
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How do tariffs hurt the dollar?
Brookings Podcast on Economic Activity
Roughly two thirds of countries on Earth stabilize their currency against the U.S. dollar. The relationship has benefits in both directions: Smaller countries enjoy better stability for their national currencies, and U.S. companies and government get low borrowing rates, among other benefits. But a new BPEA paper, “Trade War and the dollar anchor,” highlights how U.S. tariffs and retaliatory tariffs by other countries are putting pressure on the dollar’s place at the heart of world monetary system. On this episode of the Brookings Podcast on Economic Activity, one of the paper’s...
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Do American workers still move to find work?
Brookings Podcast on Economic Activity
Interstate migration has declined in the U.S. in recent decades, suggesting that workers are less likely to move in order to find employment. Such a trend would have significant policy implications for state and local governments, as well as at the federal level. But new research by Andrea Foschi, Christopher L. House, Christian Proebsting, and Linda L. Tesar suggests that it isn’t workers who have changed as much as differences in regional economies. On this episode of the Brookings Podcast on Economic Activity, House and Tesar join Brookings Senior Fellow Tara Watson to discuss the...
info_outlineEconomists have long debated the potential for rising wages and prices to push each other increasingly higher, driving inflation out of control—the so-called “wage-price spiral.” Concern about such a spiral has been high in the post-pandemic era, with inflation still running notably higher than the Federal Reserve’s 2% target. On this episode of the Brookings Podcast on Economic Activity, Martin Neil Baily of Brookings talks with the authors of a new BPEA paper on wage-price spirals, Guido Lorenzoni and Iván Werning. Their study, which developed a new model for this economic scenario, contends that because various factors drove price growth to outpace wages just after the pandemic, wages can increase faster than inflation, at least for a time, without necessarily spinning the economy out of control.
The Brookings Podcast on Economic Activity is part of the Brookings Podcast Network. Subscribe and listen on Apple, Spotify, or wherever you listen to podcasts. Send feedback email to podcasts@brookings.edu.