Economics Explored

Do central banks stabilize or destabilize economies? w/ Addison Wiggin, NYT-bestselling-author - EP196

Episode Summary

The episode delves into the effectiveness of monetary policy by central banks in managing the economy over the business cycle. Do the actions of central banks stabilize or destabilize economies? Show host Gene Tunny chats with Addison Wiggin, a bestselling author, market economist, and host of the Wiggin Sessions podcast, about monetary policy and financial crises. Addison also shares some reflections on the US debt ceiling drama. This is part 2 of the conversation Gene held with Addison in early June 2023, the first part of which was released as EP192 on the US banking crisis.

Episode Notes

The episode delves into the effectiveness of monetary policy by central banks in managing the economy over the business cycle. Do the actions of central banks stabilize or destabilize economies? Show host Gene Tunny chats with Addison Wiggin, a bestselling author, market economist, and host of the Wiggin Sessions podcast, about monetary policy and financial crises. Addison also shares some reflections on the US debt ceiling drama. This is part 2 of the conversation Gene held with Addison in early June 2023, the first part of which was released as EP192 on the US banking crisis.

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored. 

About this episode’s guest: Addison Wiggin

Three-time New York Times best-selling author, Addison Wiggin, is a 30-year market economist with a passion for the real-world impact of financial markets on our lives. Addison is the author and host of The Wiggin Sessions, a podcast that connects key thinkers and industry experts for a deep dive into history, politics, and economics. Some of his most accomplished works as a writer, publisher, and filmmaker include the New York Times Best Seller The Demise Of The Dollar and the documentary I.O.U.S.A, an exposé on the national debt crisis in America.

What’s covered in EP196

• How is it that the US dollar can be the reserve currency of the world? (2:37)
• Why not just accept that the business cycle is a thing and not do anything about it? (7:25)
• Minsky’s instability thesis. (11:42)
• The debt ceiling is just political theater. (16:52)
• Central bankers and economists thought we’d solve the problem of business cycle management. (21:29)
• How monetary policy was determined during the Gold standard era (25:06)
• When the Federal Reserve presided over the contraction of the US money supply as multiple banks failed, the money supply fell 30% from 1930 to 1933. (30:17)
• What does all this mean in the current context? (35:54)
• Central banks need to choose wisely and they need some methodology to do so. (41:23)

Links relevant to the conversation

Part 1 of Gene’s conversation with Addison:

https://economicsexplored.com/2023/06/18/exploring-the-us-banking-crisis-with-addison-wiggin-ep192/

US Federal Reserve on what happened to monetary policy during the Great Depression, “From the fall of 1930 through the winter of 1933, the money supply fell by nearly 30 percent.”:

https://www.federalreservehistory.org/essays/great-depression

Episode with Stephen Kirchner in April 2022 in which the “lean versus clean” debate was discussed:

https://economicsexplored.com/2022/04/20/nominal-gdp-targeting-w-stephen-kirchner-ep135/

Till Time's Last Sand: A History of the Bank of England by David Kynaston:

https://www.amazon.com.au/Till-Times-Last-Sand-1694-2013/dp/1408868563

Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.