Alan Taylor on financialisation, business cycles, and crises; and a mid-year review

  1. Introducing Alphachat, the FT Alphaville podcast
  2. Podcast bleg: Alphachat returns
  3. Sal Arnuk on high frequency trading
  4. Alphachat returns
  5. Snap Cyprus edition
  6. The cunning plan edition
  7. Dragons of Ljubljana edition
  8. That dang negativity edition
  9. Lee Buchheit edition, featuring Lee Buchheit
  10. Abenomics gets the Alphachat podcast treatment
  11. Alphachat Noah Smith on the Japanese economy
  12. Alphachat Manmohan Singh on collateral chains
  13. Michael Pettis edition (well, the second one)
  14. Those fracking robots edition
  15. MF Global nostalgia edition
  16. When bank capital sleeps with the fishes
  17. Alphachat Diane Coyle, Tyler Cowen, and the econ books of the year
  18. The podcast moment, and some recommendations
  19. The artisanal economy, Treasury flash crash (still not) explained, campaign Twitter spats
  20. The Fifa scandal, a big week for tech, and Gawker
  21. Nikkei buys the FT, Gillian Tett’s forthcoming new book, and an Alphavillain returns from Greece
  22. Reader Q&A, bank analyst destiny, Puerto Rican default and the Canadian elections
  23. The problems of indexed investing, “People’s QE”, and old media invests in new
  24. The Chinese economy, and the dodgy Flibanserin (fine, the “female Viagra”)
  25. Alphachat Joe Stiglitz on minimum wage, monetary policy, TPP and more
  26. Alphachat The promise (and the risks) of drones
  27. Alphachat Youtube stars, a terrible Republican debate, and the Fed holds (sorry)
  28. FT Alphachat Robert Shiller, Martin Wolf, and a tough week for biotech
  29. Anne-Marie Slaughter on gender equality, invisible Xi, and Emily Parker on the Internet in Cuba
  30. Vox-pop from the #FTPubQuiz, Jack Dorsey’s return to Twitter, and Martin Wolf on secular stagnation
  31. The podcasting biz; AB InBev to buy SABMiller; and the problem with foolproofing the economy
  32. Bernanke’s book, the TV landscape, and the Canadian election
  33. Pharma madness (Valeant, Pfizer-Allergan), and a few Angus Deaton clips
  34. Jon Stewart to HBO, Soros bails on Gross, tech for the aging, and our longform suggestions
  35. The power of talk and mythical startup valuations
  36. Robots, artificial intelligence and a sluggish shopping season
  37. The US SUV boom, Jamaica’s IMF success and a chat with Reihan Salam
  38. The future of BlackBerry, the renminbi, and George Lucas’s gift to Chicago
  39. What happens after rates rise, the shrinking middle class and pay equity
  40. The life of a dissident Cuban economist; a Mexico-US free travel zone; “Hamilton”!
  41. The FT’s US newsroom wraps up the year, looks ahead
  42. America’s eBay for guns, the gadgets of CES, and predictions for 2016
  43. Whether Davos matters, the end of privacy, and the economics of aging
  44. Cyber-security, Detroit vs Silicon Valley, and markets mayhem
  45. Mauboussin on short-termism; millenials staying put; Perella vs Kramer
  46. Michael Pettis on the Chinese economy, plus the US election and conservative talk radio
  47. The legacy of China’s one-child policy; and the fall of Theranos
  48. A new hemp SEF; AI investing; Mohamed El-Erian’s new book
  49. Super Tuesday, money in politics, and what happened to the “libertarian moment”?
  50. Dodgy corporate jet use, NGDP targeting, and the battle over IEX
  51. Why open-plan offices are terrible; new geopolitical risks; and global female labour force participation
  52. The Cuban economy, and Caroline Freund on emerging-market billionaires
  53. CEO humiliation; the future of wearables; and the problems at Valeant and Theranos
  54. The psychology and study of expertise; and the future for Disney
  55. Alternative data mining, earnings season, and Meb Faber on hedge funds
  56. Under-appreciated moments in economic history; mid-career switches; “The Age of Stagnation”
  57. Behavioural economics at work; positional goods
  58. Oil and savings; and tax havens in… South Dakota?
  59. Private equity’s mark-to-fantasy problem, and the political economy of gangster states
  60. Guy Debelle on the Fed, China, and FX
  61. Hedge fund problems, performance and personalities
  62. Maria Konnikova on social-science methods, cognitive biases, and the psychology of cons
  63. Merging with our longform podcast; responding to listeners; Heather Boushey on the economics of work and life
  64. McDonald’s as community center, the two Americas, and the reputation of Wall Street workers
  65. ETFs see jolt of volume as global markets gyrate
  66. Fact-checking Brexit claims with Tim Harford
  67. Vox-pop from Camp Alphaville; “Overrated/Underrated” with Tyler Cowen; and the JPM pay bump
  68. Alphachat guide: the tradeoffs of city life, and a new era for the business of mixed martial arts
  69. Gavyn Davies and Tyler Cowen on the productivity puzzle
  70. Heidi Williams and the economics of gene sequencing, patent design, and innovation incentives
  71. Alphachat’s inaugural film review tackles Tron and Tron Legacy
  72. The egregiously protectionist dairy racket in… Canada?
  73. The problem with drug pricing
  74. Alphachat bonus episode: Arlie Russell Hochschild’s guide to Trumpland
  75. Dan Drezner on forecasting the next-gen political economy
  76. Ryan Avent on the social capital of firms, development economics, and monetary policy
  77. Tim Harford on the unheralded virtue of messiness
  78. Comparing the candidates’ tax plans, and a GBP view from the US
  79. The psychology and neuroscience of financial decisions
  80. The Trump economy
  81. From the Trump to the Tramp
  82. Miriam Leiva, Cuban dissident, on the death of Fidel Castro
  83. Keynes vs Hayek — who’s winning now?
  84. Language, truth, and Trump
  85. Trading Places and those frozen orange juice futures
  86. The social media we deserve
  87. Michael Mauboussin reflects on thirty years of markets, cognitive biases, luck vs skill, and more
  88. Steven Johnson on how play shaped the modern world
  89. The brief history of Airbnb, and what’s next
  90. Newly conceivable ideas in economics
  91. Sebastian Edwards on why economic populism always disappoints
  92. An experiment in Kenya
  93. Erica Grieder on the Texas model
  94. How economics has evolved since the crisis
  95. Adaptive markets, and the lessons of an infamous call to sell
  96. Robert Cialdini on how persuasion works in business and politics (transcript)
  97. An all-media Alphachat episode
  98. Anne Case on mortality and morbidity in the 21st Century
  99. Tyler Cowen’s stubborn philosophical attachments
  100. Jason Furman on economic policymaking
  101. The life and ideas of Albert O Hirschman (Part 1)

Alphachat is available on Acast, iTunes and Stitcher.

Notes for this week’s episode, for which I was joined as co-host by Matt Klein of Alphaville, are below:

Credit and crises
[1:56]

Alan Taylor is an economic historian at the University of California – Davis. In a recent paper with collaborators Oscar Jorda and Moritz Schularick, the authors summarise their decades-long work on financialisation, which we discussed with Alan.

From the paper:

Our previous research uncovered a key stylized fact of modern macroeconomic history: the “financial hockey stick.” The ratio of aggregate private credit to income in advanced economies has surged to unprecedented levels over the second half of the 20th century.

The goal of this paper is to show that with this “great leveraging” key business cycle moments have become increasingly correlated with financial variables. Our long-run data show that business cycles in high-debt economies may not be especially volatile, but are more negatively skewed. Higher debt goes hand in hand with worse tail events.

A great deal of modern macroeconomic thought has relied on the small sample of US post-WW2 experience to formulate, calibrate, and test models of the business cycle, to calculate the welfare costs of fluctuations, and to analyze the benefits of stabilization policies. Yet the historical macroeconomic cross country experience is richer.

An important contribution of this paper is to introduce a new comprehensive macro-financial historical database covering 17 advanced economies over the last 150 years. This considerable data collection effort that has occupied the better part of a decade, and involved a small army of research assistants.

See more of Alan’s work here, here, and here.

Mid-year review
[18:57]

Matt and I are joined by Emiliya to discuss some of the events of the year’s first half. Matt has been struck by the Fed’s realisation that it would not be able to raise rates at the pace it expected at the end of last year. Emiliya has been troubled by the rise of populist sentiment throughout the developed world, and we talk about the role that income inequality has (and hasn’t) played. Relatedly, I’ve been dispirited by how the same populist sentiment has manifested in such loud and ugly attitudes towards immigrants and refugees.

Longform recommendations

Alan Taylor – Between Debt and the Devil and The End of Alchemy
Matt Klein – “The gun control we deserve”
Emiliya Mychasuk – Interpol Confidential
Cardiff Garcia – Marketplace Weekend podcast

  1. Introducing Alphachat, the FT Alphaville podcast
  2. Podcast bleg: Alphachat returns
  3. Sal Arnuk on high frequency trading
  4. Alphachat returns
  5. Snap Cyprus edition
  6. The cunning plan edition
  7. Dragons of Ljubljana edition
  8. That dang negativity edition
  9. Lee Buchheit edition, featuring Lee Buchheit
  10. Abenomics gets the Alphachat podcast treatment
  11. Alphachat Noah Smith on the Japanese economy
  12. Alphachat Manmohan Singh on collateral chains
  13. Michael Pettis edition (well, the second one)
  14. Those fracking robots edition
  15. MF Global nostalgia edition
  16. When bank capital sleeps with the fishes
  17. Alphachat Diane Coyle, Tyler Cowen, and the econ books of the year
  18. The podcast moment, and some recommendations
  19. The artisanal economy, Treasury flash crash (still not) explained, campaign Twitter spats
  20. The Fifa scandal, a big week for tech, and Gawker
  21. Nikkei buys the FT, Gillian Tett’s forthcoming new book, and an Alphavillain returns from Greece
  22. Reader Q&A, bank analyst destiny, Puerto Rican default and the Canadian elections
  23. The problems of indexed investing, “People’s QE”, and old media invests in new
  24. The Chinese economy, and the dodgy Flibanserin (fine, the “female Viagra”)
  25. Alphachat Joe Stiglitz on minimum wage, monetary policy, TPP and more
  26. Alphachat The promise (and the risks) of drones
  27. Alphachat Youtube stars, a terrible Republican debate, and the Fed holds (sorry)
  28. FT Alphachat Robert Shiller, Martin Wolf, and a tough week for biotech
  29. Anne-Marie Slaughter on gender equality, invisible Xi, and Emily Parker on the Internet in Cuba
  30. Vox-pop from the #FTPubQuiz, Jack Dorsey’s return to Twitter, and Martin Wolf on secular stagnation
  31. The podcasting biz; AB InBev to buy SABMiller; and the problem with foolproofing the economy
  32. Bernanke’s book, the TV landscape, and the Canadian election
  33. Pharma madness (Valeant, Pfizer-Allergan), and a few Angus Deaton clips
  34. Jon Stewart to HBO, Soros bails on Gross, tech for the aging, and our longform suggestions
  35. The power of talk and mythical startup valuations
  36. Robots, artificial intelligence and a sluggish shopping season
  37. The US SUV boom, Jamaica’s IMF success and a chat with Reihan Salam
  38. The future of BlackBerry, the renminbi, and George Lucas’s gift to Chicago
  39. What happens after rates rise, the shrinking middle class and pay equity
  40. The life of a dissident Cuban economist; a Mexico-US free travel zone; “Hamilton”!
  41. The FT’s US newsroom wraps up the year, looks ahead
  42. America’s eBay for guns, the gadgets of CES, and predictions for 2016
  43. Whether Davos matters, the end of privacy, and the economics of aging
  44. Cyber-security, Detroit vs Silicon Valley, and markets mayhem
  45. Mauboussin on short-termism; millenials staying put; Perella vs Kramer
  46. Michael Pettis on the Chinese economy, plus the US election and conservative talk radio
  47. The legacy of China’s one-child policy; and the fall of Theranos
  48. A new hemp SEF; AI investing; Mohamed El-Erian’s new book
  49. Super Tuesday, money in politics, and what happened to the “libertarian moment”?
  50. Dodgy corporate jet use, NGDP targeting, and the battle over IEX
  51. Why open-plan offices are terrible; new geopolitical risks; and global female labour force participation
  52. The Cuban economy, and Caroline Freund on emerging-market billionaires
  53. CEO humiliation; the future of wearables; and the problems at Valeant and Theranos
  54. The psychology and study of expertise; and the future for Disney
  55. Alternative data mining, earnings season, and Meb Faber on hedge funds
  56. Under-appreciated moments in economic history; mid-career switches; “The Age of Stagnation”
  57. Behavioural economics at work; positional goods
  58. Oil and savings; and tax havens in… South Dakota?
  59. Private equity’s mark-to-fantasy problem, and the political economy of gangster states
  60. Guy Debelle on the Fed, China, and FX
  61. Hedge fund problems, performance and personalities
  62. Maria Konnikova on social-science methods, cognitive biases, and the psychology of cons
  63. Merging with our longform podcast; responding to listeners; Heather Boushey on the economics of work and life
  64. McDonald’s as community center, the two Americas, and the reputation of Wall Street workers
  65. ETFs see jolt of volume as global markets gyrate
  66. Fact-checking Brexit claims with Tim Harford
  67. Vox-pop from Camp Alphaville; “Overrated/Underrated” with Tyler Cowen; and the JPM pay bump
  68. Alphachat guide: the tradeoffs of city life, and a new era for the business of mixed martial arts
  69. Gavyn Davies and Tyler Cowen on the productivity puzzle
  70. Heidi Williams and the economics of gene sequencing, patent design, and innovation incentives
  71. Alphachat’s inaugural film review tackles Tron and Tron Legacy
  72. The egregiously protectionist dairy racket in… Canada?
  73. The problem with drug pricing
  74. Alphachat bonus episode: Arlie Russell Hochschild’s guide to Trumpland
  75. Dan Drezner on forecasting the next-gen political economy
  76. Ryan Avent on the social capital of firms, development economics, and monetary policy
  77. Tim Harford on the unheralded virtue of messiness
  78. Comparing the candidates’ tax plans, and a GBP view from the US
  79. The psychology and neuroscience of financial decisions
  80. The Trump economy
  81. From the Trump to the Tramp
  82. Miriam Leiva, Cuban dissident, on the death of Fidel Castro
  83. Keynes vs Hayek — who’s winning now?
  84. Language, truth, and Trump
  85. Trading Places and those frozen orange juice futures
  86. The social media we deserve
  87. Michael Mauboussin reflects on thirty years of markets, cognitive biases, luck vs skill, and more
  88. Steven Johnson on how play shaped the modern world
  89. The brief history of Airbnb, and what’s next
  90. Newly conceivable ideas in economics
  91. Sebastian Edwards on why economic populism always disappoints
  92. An experiment in Kenya
  93. Erica Grieder on the Texas model
  94. How economics has evolved since the crisis
  95. Adaptive markets, and the lessons of an infamous call to sell
  96. Robert Cialdini on how persuasion works in business and politics (transcript)
  97. An all-media Alphachat episode
  98. Anne Case on mortality and morbidity in the 21st Century
  99. Tyler Cowen’s stubborn philosophical attachments
  100. Jason Furman on economic policymaking
  101. The life and ideas of Albert O Hirschman (Part 1)
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