1 00:00:00,240 --> 00:00:04,680 Speaker 1: I think the deep problem, the deep macro economic problem 2 00:00:04,720 --> 00:00:10,320 Speaker 1: that the world has today is that savings are exceeding 3 00:00:10,760 --> 00:00:15,040 Speaker 1: the natural level of private investment, leading to sluggish growth 4 00:00:15,160 --> 00:00:19,400 Speaker 1: and lack of inflation. That is the world's fundamental problem, 5 00:00:19,440 --> 00:00:23,040 Speaker 1: and it is not a problem that central banks can 6 00:00:23,040 --> 00:00:31,920 Speaker 1: on their own resolve. Hello, Welcome to Stephanomics, the podcast 7 00:00:31,960 --> 00:00:34,440 Speaker 1: that brings the global economy to you. And that was 8 00:00:34,479 --> 00:00:38,400 Speaker 1: the economist, sometime Biden advisor and former U. S. Treasury 9 00:00:38,440 --> 00:00:42,400 Speaker 1: Secretary Larry Sumrs. We have a world of economic wisdom 10 00:00:42,400 --> 00:00:45,560 Speaker 1: and experience on the podcast this week courtesy of the 11 00:00:45,600 --> 00:00:48,919 Speaker 1: Bloomberg New Economy Forum, which has just been held virtually 12 00:00:49,040 --> 00:00:52,559 Speaker 1: over four days and multiple time zones. You'll get a 13 00:00:52,600 --> 00:00:55,320 Speaker 1: sense of just how star studded it was when I 14 00:00:55,360 --> 00:00:58,000 Speaker 1: tell you the head of the European Central Bank, Christine Laguard, 15 00:00:58,080 --> 00:01:00,279 Speaker 1: spoke on the second day, and she was and even 16 00:01:00,360 --> 00:01:03,440 Speaker 1: the headline act top of the bill was the Indian 17 00:01:03,480 --> 00:01:07,200 Speaker 1: President Narindra Moody. On day three, it was the President 18 00:01:07,240 --> 00:01:10,800 Speaker 1: of the European Commission. And after that Bill Gate, I 19 00:01:10,840 --> 00:01:13,800 Speaker 1: didn't talk to any of them, but I did get 20 00:01:13,840 --> 00:01:15,959 Speaker 1: to talk to the Irish Prime Minister or t Shock 21 00:01:16,200 --> 00:01:20,600 Speaker 1: Mihal Martin about Brexit, the future of global trade, and 22 00:01:20,600 --> 00:01:24,319 Speaker 1: where Joe Biden's Irish grandparents came from. You can hear 23 00:01:24,360 --> 00:01:26,840 Speaker 1: some of that later, but we're going to devote most 24 00:01:26,840 --> 00:01:29,399 Speaker 1: of the program to a debate about central banks with 25 00:01:29,480 --> 00:01:33,520 Speaker 1: not one, not too but three former central bank governors. 26 00:01:34,040 --> 00:01:37,399 Speaker 1: The ex Federal Reserve Chair Janet Yellen, the economist and 27 00:01:37,480 --> 00:01:40,160 Speaker 1: former head of the Indian Central Bank, Ra Gram Rajan, 28 00:01:40,600 --> 00:01:43,360 Speaker 1: and Lord Mervin King, governor of the Bank of England 29 00:01:43,600 --> 00:01:48,080 Speaker 1: from two thousand and three until Oh yes, and Larry Summers. 30 00:01:48,440 --> 00:01:50,840 Speaker 1: If you don't want to hear those four economic rock 31 00:01:50,880 --> 00:01:54,240 Speaker 1: stars talk about the economic response to COVID and how 32 00:01:54,320 --> 00:01:56,920 Speaker 1: central banks might do a better job of serving the 33 00:01:56,920 --> 00:02:00,320 Speaker 1: whole economy, not just Wall Street. You should we really 34 00:02:00,400 --> 00:02:03,600 Speaker 1: turn off now, but the rest of you sit back 35 00:02:03,800 --> 00:02:12,440 Speaker 1: and enjoy the show. I want to spend a few 36 00:02:12,480 --> 00:02:16,720 Speaker 1: minutes very briefly thinking about how central banks have responded 37 00:02:16,760 --> 00:02:19,880 Speaker 1: to the pandemic, what's gone right, and maybe what needs 38 00:02:19,919 --> 00:02:24,440 Speaker 1: to change. Janet Yellen, well, I think central banks of 39 00:02:24,520 --> 00:02:27,880 Speaker 1: the developed countries have done a very good job of 40 00:02:28,000 --> 00:02:32,919 Speaker 1: responding to the crisis. There could have been a financial 41 00:02:33,040 --> 00:02:37,720 Speaker 1: market meltdown there was an overwhelming rush to the safety 42 00:02:37,760 --> 00:02:43,639 Speaker 1: of cash in March. It threatened massive asset fire sales, 43 00:02:44,080 --> 00:02:47,880 Speaker 1: which could have caused credit to dry up in the economy, 44 00:02:48,320 --> 00:02:53,919 Speaker 1: and the FED and other central banks erected emergency liquidity 45 00:02:53,919 --> 00:02:58,960 Speaker 1: and lending facilities that have really worked and kept credit 46 00:02:59,480 --> 00:03:04,600 Speaker 1: of owing in the economy. Monetary policy in all the 47 00:03:04,720 --> 00:03:11,520 Speaker 1: major central banks also became far more accommodative, lower policy rates, 48 00:03:11,520 --> 00:03:17,919 Speaker 1: expanded asset purchases, forward guidence. In the US, both long 49 00:03:18,000 --> 00:03:22,720 Speaker 1: and short term interest rates are near historic lows, and 50 00:03:23,040 --> 00:03:28,320 Speaker 1: they worked to boost intrasensitive sectors. And even here you 51 00:03:28,400 --> 00:03:34,360 Speaker 1: can see stronger housing in auto sales. But monetary policy 52 00:03:34,440 --> 00:03:37,920 Speaker 1: has its limits, and the notion that the FED can 53 00:03:38,000 --> 00:03:42,120 Speaker 1: do all that is required at this point to support 54 00:03:42,240 --> 00:03:46,760 Speaker 1: the economy um is just wrong, and the FED is 55 00:03:47,280 --> 00:03:54,920 Speaker 1: really pleading for fiscal relief. I believe it's essential. Lord King, 56 00:03:55,000 --> 00:03:58,720 Speaker 1: I know you've been You've echoed some of what done 57 00:03:58,720 --> 00:04:01,760 Speaker 1: it yet and has said in repeatedly saying central banks 58 00:04:01,760 --> 00:04:04,080 Speaker 1: can't do everything. Do you think they've they've played the 59 00:04:04,160 --> 00:04:08,560 Speaker 1: expectations game well in this in responding to the crisis, 60 00:04:08,640 --> 00:04:11,320 Speaker 1: or have they set them too high? So I share 61 00:04:11,400 --> 00:04:14,040 Speaker 1: much of what Janet has said, but I think to 62 00:04:14,120 --> 00:04:17,479 Speaker 1: explain what's going wrong, I don't think central banks have 63 00:04:17,640 --> 00:04:21,560 Speaker 1: explained clearly why expanding the money supply is the right 64 00:04:21,640 --> 00:04:24,720 Speaker 1: sort of response to a shutdown of the economy created 65 00:04:24,760 --> 00:04:28,560 Speaker 1: by governments different levels of governments in order to prevent 66 00:04:28,600 --> 00:04:32,440 Speaker 1: the spread of COVID nineteen. This isn't a conventional recession, 67 00:04:33,200 --> 00:04:36,040 Speaker 1: and as Janets said, the most important thing for central 68 00:04:36,040 --> 00:04:38,760 Speaker 1: banks to do now is to say that this is 69 00:04:38,800 --> 00:04:43,760 Speaker 1: a difficulty, a challenge which needs government response, not central 70 00:04:43,800 --> 00:04:46,880 Speaker 1: bank response. And I don't think it's government response in 71 00:04:46,920 --> 00:04:50,000 Speaker 1: the sense of general fiscal easy. I think it's a 72 00:04:50,040 --> 00:04:54,120 Speaker 1: response that's required to support businesses until we get through 73 00:04:54,160 --> 00:04:58,960 Speaker 1: this COVID nineteen episode, at which point we can then 74 00:04:59,040 --> 00:05:01,800 Speaker 1: let the market econ and be discided which businesses will 75 00:05:02,120 --> 00:05:04,880 Speaker 1: thrive and which will fail, which I don't think we 76 00:05:04,920 --> 00:05:07,719 Speaker 1: can do at present. And I think that although the 77 00:05:07,760 --> 00:05:11,080 Speaker 1: actions taken in March were clearly very important and central 78 00:05:11,120 --> 00:05:15,920 Speaker 1: banks acted very promptly, does beg the question that, since 79 00:05:16,000 --> 00:05:20,640 Speaker 1: markets have now calmed down, why that very significant liquidity 80 00:05:20,680 --> 00:05:24,120 Speaker 1: injection hasn't been withdrawn. And I think what's needed as 81 00:05:24,160 --> 00:05:28,560 Speaker 1: a proper narrative now to explain why these circumstances merit 82 00:05:29,480 --> 00:05:32,520 Speaker 1: particular central bank responses. I think we have to get 83 00:05:32,520 --> 00:05:35,960 Speaker 1: away from the idea that if anything goes wrong then 84 00:05:36,000 --> 00:05:38,640 Speaker 1: central banks have to step in and throw money at 85 00:05:38,680 --> 00:05:42,960 Speaker 1: the problem, right if you want to respond to what 86 00:05:42,960 --> 00:05:45,360 Speaker 1: what Lord King has said. But I'm also wondering how 87 00:05:45,360 --> 00:05:49,040 Speaker 1: emerging market central banks, you would say, have responded and 88 00:05:50,040 --> 00:05:54,440 Speaker 1: matched that that challenge that that Mervin is outlined well. 89 00:05:54,839 --> 00:05:58,719 Speaker 1: Janet talked about the advanced country central banks have done 90 00:05:58,880 --> 00:06:01,279 Speaker 1: having done a fantasty job, and I think this did 91 00:06:01,400 --> 00:06:04,520 Speaker 1: help many emerging markets which were subject to the same 92 00:06:04,600 --> 00:06:07,760 Speaker 1: kind of stress that you saw in the beginning of 93 00:06:07,920 --> 00:06:12,480 Speaker 1: the crisis in March, and the accommodative policies of the 94 00:06:12,480 --> 00:06:16,839 Speaker 1: Federal Reserve the ECP Bank of Japan helped alleviate some 95 00:06:16,920 --> 00:06:21,920 Speaker 1: of that e M stress. Also, emerging markets have adopted 96 00:06:22,080 --> 00:06:26,080 Speaker 1: some of the tools from the Industrial country center bank 97 00:06:26,440 --> 00:06:30,760 Speaker 1: toolkit to help their governments do the spending which has 98 00:06:30,800 --> 00:06:35,240 Speaker 1: Merman said is extremely important to ensure the real economy 99 00:06:35,360 --> 00:06:39,599 Speaker 1: doesn't collapse. That you you maintain the body economic by 100 00:06:39,680 --> 00:06:43,400 Speaker 1: helping small and medium enterprises and helping households. That requires 101 00:06:43,400 --> 00:06:48,440 Speaker 1: spending and central banks in Indonesia, Poland across the emerging 102 00:06:48,640 --> 00:06:52,960 Speaker 1: world have supported their governments. The key question now, of course, 103 00:06:53,360 --> 00:06:56,440 Speaker 1: is how do you sort of ensure that that bridge 104 00:06:56,800 --> 00:06:59,560 Speaker 1: which was built to the end of the virus, it 105 00:06:59,680 --> 00:07:02,640 Speaker 1: actually the extents that far and there are fears in 106 00:07:02,640 --> 00:07:06,080 Speaker 1: industrial countries it may be too short. And emerging markets 107 00:07:06,120 --> 00:07:09,160 Speaker 1: didn't build a pretty strong bit breach in the first 108 00:07:09,160 --> 00:07:12,920 Speaker 1: place because they had very limited resources, and that means 109 00:07:13,000 --> 00:07:15,600 Speaker 1: that there is far more stress which has built up 110 00:07:15,680 --> 00:07:19,120 Speaker 1: within the system, which has been hidden by moratoria by 111 00:07:19,160 --> 00:07:23,480 Speaker 1: payment sort of postponements, and that stress has to be 112 00:07:23,600 --> 00:07:26,880 Speaker 1: dealt with. This is not a central bank problem. There's 113 00:07:26,920 --> 00:07:30,440 Speaker 1: a problem of fixing the judicial system so that it 114 00:07:30,520 --> 00:07:35,320 Speaker 1: can alleviate stress, fixing the you know, debt renegotiation system. 115 00:07:35,640 --> 00:07:39,320 Speaker 1: And again I landed by saying, so far it's been 116 00:07:39,440 --> 00:07:43,240 Speaker 1: very good. But whenever you get into these kinds of policies, 117 00:07:43,440 --> 00:07:47,080 Speaker 1: exit is often a great issue. How do we exit 118 00:07:47,360 --> 00:07:50,960 Speaker 1: without tanking the system? Once again, and it's too early 119 00:07:51,000 --> 00:07:54,160 Speaker 1: to start thinking about about it, but it is a 120 00:07:54,240 --> 00:07:57,480 Speaker 1: question which will face us down the line. Larice I was, 121 00:07:57,560 --> 00:07:59,040 Speaker 1: let's take it just but if we take from the 122 00:07:59,080 --> 00:08:02,360 Speaker 1: other three speakers, old has gone right in the major 123 00:08:02,400 --> 00:08:05,760 Speaker 1: central banks response, But what would you have done differently? 124 00:08:07,000 --> 00:08:12,280 Speaker 1: The big thing was preventing a financial collapse. The central 125 00:08:12,320 --> 00:08:17,280 Speaker 1: banks acted definitively to do that. That's all that was 126 00:08:17,400 --> 00:08:23,320 Speaker 1: ultimately historically important. The mistake is for them to vastly 127 00:08:23,400 --> 00:08:29,360 Speaker 1: exaggerate their continuing relevance. They lack, starting at the zero 128 00:08:29,400 --> 00:08:34,120 Speaker 1: bound where we are, the capacity to provide meaningful impetus 129 00:08:34,200 --> 00:08:38,160 Speaker 1: to their economies in any way that is consistent with 130 00:08:38,280 --> 00:08:41,920 Speaker 1: any concept of central bank functioning. They do not have 131 00:08:41,960 --> 00:08:46,240 Speaker 1: the capacity to meaningfully affect the degree of inequality. They 132 00:08:46,280 --> 00:08:49,600 Speaker 1: do not have the capacity to vaccinate people. They do 133 00:08:49,679 --> 00:08:54,560 Speaker 1: not have the capacity to fight uh climate change, and 134 00:08:54,600 --> 00:08:59,520 Speaker 1: they need to acknowledge the limitations of their influence in 135 00:08:59,559 --> 00:09:02,800 Speaker 1: a clear your way, so there can be no pretending 136 00:09:03,320 --> 00:09:06,760 Speaker 1: about what they're going to do, and that the authorities 137 00:09:06,840 --> 00:09:10,880 Speaker 1: have the responsibilities they do. The central banks have also, 138 00:09:11,160 --> 00:09:15,360 Speaker 1: in my view, not put adequate emphasis on the global 139 00:09:15,400 --> 00:09:20,599 Speaker 1: dimensions of this problem. A striking feature of the contrast 140 00:09:20,720 --> 00:09:23,920 Speaker 1: between this crisis and the last crisis is that the 141 00:09:24,000 --> 00:09:27,160 Speaker 1: last crisis had a major response from the I m 142 00:09:27,240 --> 00:09:31,520 Speaker 1: F issue in sevesdrs, big increases in lending from the 143 00:09:31,559 --> 00:09:35,600 Speaker 1: World Bank that was driven by the global community. There 144 00:09:35,600 --> 00:09:40,200 Speaker 1: has been no baldness at the global level comparable to 145 00:09:40,280 --> 00:09:44,079 Speaker 1: the boldness at the national level, and that could get 146 00:09:44,160 --> 00:09:47,560 Speaker 1: us in real trouble uh down the road, as ragou 147 00:09:48,080 --> 00:09:51,679 Speaker 1: Uh points out, And frankly, the central bankers, because they 148 00:09:51,679 --> 00:09:55,960 Speaker 1: want to curry domestic political favor in each country, have 149 00:09:56,320 --> 00:09:59,520 Speaker 1: not had enough to say about that. Just to come 150 00:09:59,520 --> 00:10:01,920 Speaker 1: back on Uh, you talk about a lack of boldness, 151 00:10:02,080 --> 00:10:04,880 Speaker 1: I mean there's time. As you've proposed as one of 152 00:10:04,920 --> 00:10:08,319 Speaker 1: the things that could happen to support the global system, 153 00:10:08,360 --> 00:10:12,760 Speaker 1: a big new issuance of IMF Special drawing rights SDRs. 154 00:10:12,800 --> 00:10:16,160 Speaker 1: We have to ask you, have you persuaded incoming President 155 00:10:16,920 --> 00:10:20,320 Speaker 1: Joe Biden of back yet. I'll speak for themselves. I'm 156 00:10:20,400 --> 00:10:23,880 Speaker 1: optimistic that the the US will not be the kind 157 00:10:23,880 --> 00:10:26,640 Speaker 1: of block on that proposal that it has been before. 158 00:10:26,679 --> 00:10:31,120 Speaker 1: And of course it's possible to do substantial things issuances 159 00:10:31,200 --> 00:10:36,880 Speaker 1: of five billion dollars without congressional approval, So I'm optimistic 160 00:10:37,240 --> 00:10:40,840 Speaker 1: that we'll see progress on that. But I think that 161 00:10:41,200 --> 00:10:44,920 Speaker 1: unlike the central bankers of an earlier era, you have 162 00:10:45,080 --> 00:10:51,679 Speaker 1: seen much less discussion in the Central banking uh community 163 00:10:51,760 --> 00:10:58,960 Speaker 1: of the global imperative, particularly the challenges necessary if emerging 164 00:10:59,040 --> 00:11:03,920 Speaker 1: markets are to avoid a wave of financial crises going forward, 165 00:11:04,200 --> 00:11:08,960 Speaker 1: the issues associated with debt relief, and I think that's 166 00:11:09,000 --> 00:11:11,880 Speaker 1: been unfortunate, and I have to say, I think it's 167 00:11:11,880 --> 00:11:17,120 Speaker 1: been because the central banks have been excessively focused with 168 00:11:17,280 --> 00:11:22,679 Speaker 1: their domestic politics, which leads them to talk about subjects 169 00:11:23,120 --> 00:11:27,280 Speaker 1: like small business, like the environment, which are really not 170 00:11:27,840 --> 00:11:39,520 Speaker 1: basically within their proper remit. John, Yeah, do you agree 171 00:11:39,679 --> 00:11:43,040 Speaker 1: that that maybe Defense shouldn't be talking about needing to 172 00:11:43,520 --> 00:11:48,160 Speaker 1: target the difference between black and white unemployment rates, for example, 173 00:11:48,200 --> 00:11:51,200 Speaker 1: as it did in this summer, and shouldn't be engaging 174 00:11:51,240 --> 00:11:56,319 Speaker 1: on this broader agenda's climate change. So the FIT is 175 00:11:56,360 --> 00:12:03,320 Speaker 1: always operated under a dual mandate. It's inflation and maximum employment. 176 00:12:04,040 --> 00:12:09,720 Speaker 1: And in this environment of very low inflation to low inflation, 177 00:12:10,360 --> 00:12:14,720 Speaker 1: there's really no conflict whatever between these two goals. And 178 00:12:15,160 --> 00:12:19,200 Speaker 1: the FED is really focused on trying to create a 179 00:12:19,400 --> 00:12:22,840 Speaker 1: very strong job market, and I think that they have 180 00:12:23,000 --> 00:12:26,560 Speaker 1: made that clear. I'm not sure everyone in the public 181 00:12:26,679 --> 00:12:32,320 Speaker 1: on main street understands that, but full employment is a 182 00:12:32,360 --> 00:12:35,760 Speaker 1: goal that they order to pursue. Um I agree with 183 00:12:35,920 --> 00:12:40,160 Speaker 1: Larry that the effective lower bound. There's a big constraint. 184 00:12:40,720 --> 00:12:43,520 Speaker 1: At this point, they're doing almost all they can do. 185 00:12:43,600 --> 00:12:47,559 Speaker 1: They need fiscal policy to help, but UM, when they 186 00:12:47,600 --> 00:12:53,800 Speaker 1: talk about inequality and the disproportionate burdens on minority workers, 187 00:12:54,400 --> 00:12:58,320 Speaker 1: what they can do is to try to pursue the 188 00:12:58,400 --> 00:13:03,280 Speaker 1: strongest possible job market, because when they're successful at that, 189 00:13:03,720 --> 00:13:08,719 Speaker 1: as they were prior to the pandemic with unemployment, it 190 00:13:09,559 --> 00:13:13,160 Speaker 1: a fifty year lower three and a half percent that 191 00:13:13,400 --> 00:13:19,040 Speaker 1: brings benefits, particularly to less skilled and minority workers. When 192 00:13:19,120 --> 00:13:23,320 Speaker 1: job markets are really tight, we saw wages rising most 193 00:13:23,480 --> 00:13:28,559 Speaker 1: rapidly at the bottom of the wage distribution, UM workers 194 00:13:28,840 --> 00:13:32,880 Speaker 1: being pulled off to this off from the sidelines. Coming 195 00:13:32,920 --> 00:13:38,520 Speaker 1: back into the labor market, firms finding it incredibly difficult 196 00:13:38,559 --> 00:13:44,440 Speaker 1: to hire lowering qualifications, engaging in their own training to 197 00:13:44,559 --> 00:13:49,360 Speaker 1: bring people up to speed, UM willing to hire people 198 00:13:49,600 --> 00:13:53,720 Speaker 1: that with a weak labor market, their resumes would have ended, 199 00:13:54,000 --> 00:13:58,000 Speaker 1: wouldn't have been looked at it all. And the FED 200 00:13:58,160 --> 00:14:04,319 Speaker 1: has recently revised its framework UM for conducting monetary policy 201 00:14:04,360 --> 00:14:09,320 Speaker 1: and emphasized that full employment is a broadened inclusive goal, 202 00:14:09,760 --> 00:14:15,360 Speaker 1: and they've changed their operating strategy to and because of 203 00:14:15,400 --> 00:14:19,160 Speaker 1: the importance of the effective lower band to pursue that 204 00:14:19,240 --> 00:14:22,400 Speaker 1: with vigor and I think that's appropriate, and I think 205 00:14:22,440 --> 00:14:28,040 Speaker 1: it's the strongest contribution that central banks can make to 206 00:14:29,000 --> 00:14:33,280 Speaker 1: UM trying to deal within equality. They don't have other tools. 207 00:14:34,760 --> 00:14:37,200 Speaker 1: Can I just see whether we're in agreement? I am 208 00:14:37,880 --> 00:14:40,960 Speaker 1: pent in agree with the agreement with you on the 209 00:14:41,080 --> 00:14:46,080 Speaker 1: absolute importance of maximizing employment in the current context when 210 00:14:46,440 --> 00:14:51,280 Speaker 1: there's no real danger of getting inflation to an excessive level. 211 00:14:51,640 --> 00:14:56,600 Speaker 1: I am in a hundred agreement with you that maximizing 212 00:14:56,680 --> 00:15:00,720 Speaker 1: employment is the best social program of all and confers 213 00:15:00,880 --> 00:15:05,440 Speaker 1: all sorts of benefits. But don't we think that central 214 00:15:05,440 --> 00:15:10,360 Speaker 1: banks really need to be careful about holding out the 215 00:15:10,440 --> 00:15:16,240 Speaker 1: idea that they are relevant to sectoral issues involving differentials 216 00:15:16,280 --> 00:15:23,760 Speaker 1: between one sector and another, or structural issues like environmental protection. 217 00:15:23,880 --> 00:15:27,160 Speaker 1: Would you agree, for example, that any idea that the 218 00:15:27,240 --> 00:15:30,920 Speaker 1: BED should make special efforts to buy green bonds is 219 00:15:30,960 --> 00:15:35,520 Speaker 1: a confusion? So UM, I don't think. I've never heard 220 00:15:35,600 --> 00:15:39,720 Speaker 1: the FIT say that they're trying to target the unemployment 221 00:15:39,880 --> 00:15:44,520 Speaker 1: rates or situations of any particular group in the tight 222 00:15:44,720 --> 00:15:50,440 Speaker 1: labor market. The gaps I think between UM, for example, 223 00:15:50,520 --> 00:15:54,800 Speaker 1: the unemployment rates of minorities and white skins to narrow. 224 00:15:55,720 --> 00:15:58,880 Speaker 1: I don't think there's anything they can do on that 225 00:15:59,200 --> 00:16:04,560 Speaker 1: front beyond a generally strong labor market. So it would 226 00:16:04,560 --> 00:16:08,200 Speaker 1: be a mistake, I think, to say we're targeting the 227 00:16:08,280 --> 00:16:15,280 Speaker 1: unemployment rate of any particular groups. And on sustainable UM goals, 228 00:16:15,760 --> 00:16:21,160 Speaker 1: I think it does make sense for in supervision to 229 00:16:21,320 --> 00:16:26,960 Speaker 1: be taking the risks from climate change, both climate related 230 00:16:27,120 --> 00:16:31,320 Speaker 1: risks and the risks of changes and prices um and 231 00:16:31,440 --> 00:16:38,440 Speaker 1: stranded assets as countries adopt meaningful climate policy, to consider 232 00:16:38,560 --> 00:16:42,040 Speaker 1: that as a risk to banking organizations, and to do 233 00:16:42,240 --> 00:16:45,480 Speaker 1: stress tests to look at that. But of course we 234 00:16:45,560 --> 00:16:50,200 Speaker 1: need public policy oriented toward making a big difference on 235 00:16:50,360 --> 00:16:53,160 Speaker 1: climate change, and I agree with you that is not 236 00:16:53,400 --> 00:16:58,160 Speaker 1: something central banks can be asked to accomplish. Not the Kate. 237 00:16:58,760 --> 00:17:01,440 Speaker 1: We remember the title of this is about main Street 238 00:17:01,720 --> 00:17:05,879 Speaker 1: or Wall Street. Given what what Larry has said, do 239 00:17:05,960 --> 00:17:08,879 Speaker 1: you think that central Banks or the Bank of England 240 00:17:08,960 --> 00:17:11,760 Speaker 1: or other central banks have done enough to show that 241 00:17:11,800 --> 00:17:14,760 Speaker 1: they're supporting main Street not just Wall Street. Do you 242 00:17:14,800 --> 00:17:17,080 Speaker 1: worry about the fact that they are perceived to be 243 00:17:17,240 --> 00:17:21,200 Speaker 1: propping up asset prices as a main tool of policy 244 00:17:21,240 --> 00:17:27,280 Speaker 1: at the moment. Well, I am concerned that the fact 245 00:17:27,280 --> 00:17:30,880 Speaker 1: that the narrative about why monetary using has been so 246 00:17:30,960 --> 00:17:35,480 Speaker 1: strong in these particular circumstances, that narrative hasn't been made clear. 247 00:17:36,119 --> 00:17:38,840 Speaker 1: So it's not surprising that some people have gone away 248 00:17:38,840 --> 00:17:42,080 Speaker 1: with the impression that the objective of central banks is 249 00:17:42,119 --> 00:17:45,720 Speaker 1: to support asset prices. I don't think that is their objective, 250 00:17:45,800 --> 00:17:48,280 Speaker 1: but I think I can see why some people might 251 00:17:48,359 --> 00:17:52,040 Speaker 1: think it. I think Chaney is very compelling in arguing 252 00:17:52,040 --> 00:17:55,000 Speaker 1: that the dual mandate for the FED allows the FED 253 00:17:55,040 --> 00:17:59,280 Speaker 1: to pursue strategies that will maximize employment. And it's reasonable 254 00:17:59,400 --> 00:18:03,400 Speaker 1: to argue you and to explain why that strategy will 255 00:18:03,440 --> 00:18:07,000 Speaker 1: have benefits, for why the constituencies in the country, not 256 00:18:07,119 --> 00:18:12,640 Speaker 1: just the aggregate, but individual groups would benefit. To Larry Summers, 257 00:18:13,119 --> 00:18:17,400 Speaker 1: in the response to this great need, the popular need 258 00:18:17,440 --> 00:18:20,920 Speaker 1: to show that the policy is more inclusive, that globalization 259 00:18:20,960 --> 00:18:23,320 Speaker 1: could be more inclusive, and to the long list of 260 00:18:23,400 --> 00:18:26,000 Speaker 1: things that you said that central banks are impotent about, 261 00:18:26,359 --> 00:18:29,560 Speaker 1: could be just to say central bank's main role now 262 00:18:29,680 --> 00:18:33,359 Speaker 1: is just to make large scale fiscal action affordable, just 263 00:18:33,400 --> 00:18:35,880 Speaker 1: as they effectively have this year by keeping rates low, 264 00:18:36,200 --> 00:18:38,439 Speaker 1: making it possible for governments to borrow. Should they just 265 00:18:38,480 --> 00:18:41,119 Speaker 1: recognize that that is their main role at this point. 266 00:18:43,160 --> 00:18:44,960 Speaker 1: I wouldn't put it that way. I would put it 267 00:18:45,040 --> 00:18:50,400 Speaker 1: that their main role is to support stable, non inflationary 268 00:18:50,480 --> 00:18:55,000 Speaker 1: economic growth, and I think for the foreseeable future that's 269 00:18:55,080 --> 00:18:58,679 Speaker 1: likely to involve keeping interest rates at very low levels. 270 00:18:59,240 --> 00:19:03,840 Speaker 1: I think the deep problem, the deep macroeconomic problem that 271 00:19:03,880 --> 00:19:09,879 Speaker 1: the world has today is that savings are exceeding the 272 00:19:10,000 --> 00:19:14,159 Speaker 1: natural level of private investment, putting downwards pressure on interest 273 00:19:14,240 --> 00:19:17,680 Speaker 1: rates to near zero real interest rate or below UH 274 00:19:17,920 --> 00:19:22,080 Speaker 1: levels and leading to sluggish growth and lack of inflation. 275 00:19:22,640 --> 00:19:26,000 Speaker 1: And that is the world's fundamental problem. And it is 276 00:19:26,040 --> 00:19:30,280 Speaker 1: not a problem that central banks can on their own resolve. 277 00:19:30,920 --> 00:19:34,320 Speaker 1: It is a problem that central banks can acknowledge. Is 278 00:19:34,760 --> 00:19:39,120 Speaker 1: Janet certainly has in her period in the period after 279 00:19:39,240 --> 00:19:42,880 Speaker 1: she left office in very strong and clear ways as 280 00:19:42,920 --> 00:19:46,760 Speaker 1: the evidence has become UH clearer. But they need to 281 00:19:46,840 --> 00:19:50,400 Speaker 1: point up this as a problem, recognize that it has 282 00:19:50,520 --> 00:19:55,400 Speaker 1: important implications for fiscal policy, that it has important implications 283 00:19:55,440 --> 00:19:58,919 Speaker 1: for the ways in which governments manage their debts, and 284 00:19:58,960 --> 00:20:03,760 Speaker 1: that they are prepared UH to UH do their part. 285 00:20:04,200 --> 00:20:08,320 Speaker 1: Doesn't necessarily mean explosions in debt, but it does mean 286 00:20:08,840 --> 00:20:12,800 Speaker 1: careful thought about a range of fiscal and structural policies. 287 00:20:13,119 --> 00:20:17,040 Speaker 1: But we do need to recognize that Whereas from the 288 00:20:17,160 --> 00:20:22,160 Speaker 1: period from the late nineteen seventies until the early two thousands, 289 00:20:22,640 --> 00:20:27,439 Speaker 1: the central macroeconomic problems were the temptation to inflate and 290 00:20:27,520 --> 00:20:32,200 Speaker 1: the crowding out of private investment by budget deficits, today 291 00:20:32,520 --> 00:20:36,640 Speaker 1: the central problem is absorbing all the savings in a 292 00:20:36,640 --> 00:20:40,600 Speaker 1: healthy way so that we have strong economic growth and 293 00:20:40,640 --> 00:20:45,399 Speaker 1: we don't have huge leverage and huge financial bubbles. And 294 00:20:45,480 --> 00:20:49,960 Speaker 1: that is a fundamentally different macro economic problem. The calls 295 00:20:50,080 --> 00:20:55,159 Speaker 1: for fundamentally different macro economic strategies, of which there may 296 00:20:55,200 --> 00:20:59,040 Speaker 1: be a role for inflation targeting, but it is largely 297 00:20:59,080 --> 00:21:02,720 Speaker 1: beside the point in a world where the real problem 298 00:21:02,880 --> 00:21:08,359 Speaker 1: is insufficient price inflation and excessive asset price inflation, and 299 00:21:08,400 --> 00:21:12,920 Speaker 1: we need to adjust central banks paradigm to take account 300 00:21:13,000 --> 00:21:16,240 Speaker 1: of uh those realities. Look, if I can say one 301 00:21:16,280 --> 00:21:23,560 Speaker 1: more thing, the world's financial leaders said after Dodd Frank 302 00:21:23,760 --> 00:21:28,800 Speaker 1: was passed, after the Financial Stavility Forum did all its things, 303 00:21:28,840 --> 00:21:32,040 Speaker 1: that we now had a much healthier financial system that 304 00:21:32,119 --> 00:21:37,200 Speaker 1: could continue to function without large scale bailouts less than 305 00:21:37,280 --> 00:21:41,320 Speaker 1: five years after that was definitively proclaimed. We've had the 306 00:21:41,359 --> 00:21:45,879 Speaker 1: biggest set of actions directed at propping up the financial 307 00:21:45,920 --> 00:21:50,800 Speaker 1: system in UH global history. And while it's looking okay 308 00:21:50,880 --> 00:21:53,960 Speaker 1: right now, as Ragou said, we're not sure that even 309 00:21:54,000 --> 00:21:56,919 Speaker 1: what we've done is going to be enough to hold. 310 00:21:57,400 --> 00:22:01,520 Speaker 1: That suggests the need for a great, all a fundamental rethinking. 311 00:22:02,480 --> 00:22:05,399 Speaker 1: John Yellen, what's your response to what what Larry was 312 00:22:05,440 --> 00:22:09,280 Speaker 1: just saying? Well, I agree very much with Larry. I 313 00:22:09,320 --> 00:22:13,560 Speaker 1: think he gave an excellent description of what the core 314 00:22:13,720 --> 00:22:19,119 Speaker 1: problem is that the developed world faces. That there is 315 00:22:19,160 --> 00:22:23,960 Speaker 1: a glood of saving and a shortage of investment. And 316 00:22:24,480 --> 00:22:28,600 Speaker 1: that's why the effect of lower bound is such an 317 00:22:28,640 --> 00:22:33,600 Speaker 1: important constraint. And it's what really means that we have 318 00:22:33,720 --> 00:22:38,760 Speaker 1: to have fiscal policy, structural policy, and things other than 319 00:22:38,880 --> 00:22:46,480 Speaker 1: just relying on central banks UM to UH keep healthy 320 00:22:46,520 --> 00:22:52,760 Speaker 1: growth with low inflation UM. I think central banks need 321 00:22:52,880 --> 00:22:57,199 Speaker 1: to do what they can, but then not overstate UM 322 00:22:57,359 --> 00:23:01,160 Speaker 1: what it's possible for them to do UH to FED 323 00:23:01,400 --> 00:23:08,399 Speaker 1: his recently concluded its strategic policy review and made adjustments 324 00:23:08,520 --> 00:23:15,160 Speaker 1: to UM its monetary policy strategy, adopting a system called 325 00:23:15,280 --> 00:23:22,560 Speaker 1: flexible average inflation targeting. I think this is an appropriate change. 326 00:23:22,640 --> 00:23:27,800 Speaker 1: It somewhat improves the scope for monetary policy to support 327 00:23:27,840 --> 00:23:32,600 Speaker 1: the economy when short term interest rates are often constrained 328 00:23:32,640 --> 00:23:36,600 Speaker 1: by the effect of lower bound I think it's helpful 329 00:23:36,720 --> 00:23:43,560 Speaker 1: in preventing a cycle of falling inflation feeding falling inflation expectations. 330 00:23:44,240 --> 00:23:48,199 Speaker 1: But well, I strongly believe central banks need to be 331 00:23:48,320 --> 00:23:52,560 Speaker 1: independent and need to do everything they can. The changes 332 00:23:52,680 --> 00:23:55,800 Speaker 1: they've made, they're not a game changer from the point 333 00:23:55,840 --> 00:23:59,639 Speaker 1: of view of secular stagnation and bottom line, I agree 334 00:23:59,680 --> 00:24:04,080 Speaker 1: with Ring on which which required it's a lot about 335 00:24:04,160 --> 00:24:06,919 Speaker 1: the importance of fiscal policy at this moment. I have 336 00:24:07,080 --> 00:24:10,120 Speaker 1: to ask you, would you like to be more closely 337 00:24:10,160 --> 00:24:13,639 Speaker 1: involved in that as a treasury Treasury secretary for the 338 00:24:13,680 --> 00:24:17,040 Speaker 1: new administration. I don't have anything for you, and that 339 00:24:17,240 --> 00:24:21,200 Speaker 1: I'm sorry you don't think you'd be a good Treasury secretary? 340 00:24:21,240 --> 00:24:23,000 Speaker 1: Could I ask you that? I could probably ask the 341 00:24:23,040 --> 00:24:26,160 Speaker 1: rest of the panel that for other people to decide. 342 00:24:26,200 --> 00:24:30,240 Speaker 1: I think, yeah, she would be a great Treasury secretary. 343 00:24:30,280 --> 00:24:34,119 Speaker 1: But let let me talk about another issue, which is 344 00:24:34,720 --> 00:24:39,199 Speaker 1: related to Larry's secular stagnation idea. I mean, in some sense, 345 00:24:39,560 --> 00:24:43,080 Speaker 1: the hope for the world was that fast growing emerging 346 00:24:43,119 --> 00:24:47,040 Speaker 1: markets and developing countries would provide that demand, which sorely 347 00:24:47,080 --> 00:24:50,440 Speaker 1: seems lacking at the aggregate level. One of the big 348 00:24:50,480 --> 00:24:53,920 Speaker 1: concerns we should have with this pandemic is how much 349 00:24:53,960 --> 00:24:57,000 Speaker 1: scarring has gone on in those economies because they haven't 350 00:24:57,000 --> 00:24:59,920 Speaker 1: had the ability to provide the kind of fiscal as 351 00:25:00,000 --> 00:25:03,119 Speaker 1: well as credit support and industrial countries have. So my 352 00:25:03,240 --> 00:25:07,120 Speaker 1: worry is, apart from the North Asian economies which seem 353 00:25:07,200 --> 00:25:10,440 Speaker 1: to have come out quite well from this crisis, many 354 00:25:10,480 --> 00:25:14,720 Speaker 1: countries in Latin America, Africa, South Asia are going to 355 00:25:14,800 --> 00:25:19,159 Speaker 1: suffer some diminishing in growth potential going forward, coupled with 356 00:25:19,240 --> 00:25:22,320 Speaker 1: some of the impediments to create that we see. I 357 00:25:22,359 --> 00:25:25,440 Speaker 1: think this is a cause for concern for the global economy. 358 00:25:25,760 --> 00:25:29,040 Speaker 1: It's something that we should very much work very hard 359 00:25:29,080 --> 00:25:32,159 Speaker 1: over the next few years to try and reverse. And 360 00:25:32,240 --> 00:25:35,840 Speaker 1: that's where Larry's called for global sort of leadership I 361 00:25:35,840 --> 00:25:40,600 Speaker 1: think makes a huge is a huge importance. We all 362 00:25:40,640 --> 00:25:45,320 Speaker 1: talk about cooperating with China on the most important global issues, 363 00:25:45,600 --> 00:25:49,840 Speaker 1: there needs to be cooperation with China on the whole 364 00:25:49,880 --> 00:25:55,760 Speaker 1: set of issues around support for emerging markets. If central 365 00:25:55,800 --> 00:26:00,480 Speaker 1: banks could explain, not that they can do it, but 366 00:26:00,680 --> 00:26:04,760 Speaker 1: that ultimately the financial stability of all the institutions they're 367 00:26:04,800 --> 00:26:10,440 Speaker 1: responsible for, the financial stability of their economies depends much 368 00:26:10,480 --> 00:26:16,480 Speaker 1: more urgently on achieving successful global cooperation than it does 369 00:26:16,960 --> 00:26:21,560 Speaker 1: on anything else. If they could make that case, they 370 00:26:21,560 --> 00:26:24,879 Speaker 1: would be making a much greater contribution to the current 371 00:26:24,880 --> 00:26:28,840 Speaker 1: global moment than they currently are. I agree with Mervin, 372 00:26:29,320 --> 00:26:32,520 Speaker 1: but I think the world looks to the central banking 373 00:26:32,680 --> 00:26:39,119 Speaker 1: community two explain the nature of the macro economic challenges 374 00:26:39,280 --> 00:26:43,320 Speaker 1: before it, even if the central banks themselves lack the 375 00:26:43,400 --> 00:26:46,320 Speaker 1: tools to deal with it. And if the central banking 376 00:26:46,400 --> 00:26:50,560 Speaker 1: community can explain, as Janet uh just is is. I 377 00:26:50,600 --> 00:26:54,159 Speaker 1: tried to um a little bit in talking about the 378 00:26:54,240 --> 00:26:58,200 Speaker 1: absorption of saving problem. If that problem can be laid 379 00:26:58,200 --> 00:27:02,439 Speaker 1: out clearly, that is the first step. It's not doesn't 380 00:27:02,440 --> 00:27:04,760 Speaker 1: solve it to lay it out clearly, but it's a 381 00:27:04,800 --> 00:27:08,720 Speaker 1: crucial step towards the whole range of measures. And you're 382 00:27:08,760 --> 00:27:12,720 Speaker 1: absolutely right, Mervin, that it involves a million different things 383 00:27:12,760 --> 00:27:15,840 Speaker 1: that are necessary to resolve it. But first we need 384 00:27:15,840 --> 00:27:18,879 Speaker 1: to to find that problem, and that's something central banks 385 00:27:18,920 --> 00:27:23,119 Speaker 1: can surely do. Lord Mervin King Ragan, Janet Yellen and 386 00:27:23,200 --> 00:27:34,399 Speaker 1: Larry Summers. Thank you very much. We could end the 387 00:27:34,440 --> 00:27:36,960 Speaker 1: podcast there, but I wanted to give you a short 388 00:27:37,040 --> 00:27:39,720 Speaker 1: taste of my conversation with the Irish tea shop or 389 00:27:39,800 --> 00:27:43,399 Speaker 1: Prime Minister Mihal Martin. He'd recently had a warm phone 390 00:27:43,440 --> 00:27:46,439 Speaker 1: conversation with President elect Joe Biden and I couldn't resist 391 00:27:46,440 --> 00:27:49,840 Speaker 1: asking him about that. But come January one, the UK 392 00:27:50,000 --> 00:27:52,200 Speaker 1: will no longer be trading on the rules it had 393 00:27:52,480 --> 00:27:55,359 Speaker 1: while it was inside the European Union. It will be 394 00:27:55,440 --> 00:27:59,560 Speaker 1: fully out and with six weeks to go, we still 395 00:27:59,600 --> 00:28:03,040 Speaker 1: don't know what comes next. We do know that Ireland 396 00:28:03,119 --> 00:28:05,600 Speaker 1: is stuck in the middle and has a huge stake 397 00:28:05,640 --> 00:28:08,840 Speaker 1: in what happens. I started by asking him whether he 398 00:28:08,960 --> 00:28:12,800 Speaker 1: thought these last minute negotiations we're going to produce a deal. 399 00:28:17,119 --> 00:28:19,880 Speaker 1: I would still hope there will be a comprehensive trade deal, 400 00:28:19,920 --> 00:28:22,880 Speaker 1: but it will be challenging my sense of if there's 401 00:28:22,920 --> 00:28:26,159 Speaker 1: a political will in the United Kingdom to get a 402 00:28:26,160 --> 00:28:28,639 Speaker 1: Brexit deal done, then it will happen. I think the 403 00:28:28,680 --> 00:28:32,679 Speaker 1: European Union want a deal of that. I'm clear not 404 00:28:32,720 --> 00:28:36,359 Speaker 1: an advanced but it's our view and it's Ireland's as 405 00:28:36,400 --> 00:28:40,200 Speaker 1: a member state that is in the interests of our 406 00:28:40,240 --> 00:28:43,640 Speaker 1: citizens and respect of economies to get a deal that 407 00:28:43,760 --> 00:28:46,280 Speaker 1: makes sense, and no deal would be very damaging to 408 00:28:46,440 --> 00:28:49,600 Speaker 1: our respective economies. Logic dictates we should we do. We 409 00:28:49,600 --> 00:28:51,320 Speaker 1: should do everything we pass we can to get a deal. 410 00:28:51,520 --> 00:28:53,560 Speaker 1: It's a responsible thing as politicians to do in behalf 411 00:28:53,560 --> 00:28:56,000 Speaker 1: of the citizens that we represent. We now have an 412 00:28:56,080 --> 00:28:59,400 Speaker 1: incoming US president who has made very clear his views 413 00:29:00,000 --> 00:29:03,040 Speaker 1: on the Good Friday Agreement and the importance of their 414 00:29:03,080 --> 00:29:07,880 Speaker 1: not being a hard border between Northern Ireland and Ireland. 415 00:29:07,880 --> 00:29:09,800 Speaker 1: Do you think that changes the calculus? Do you think 416 00:29:09,840 --> 00:29:13,800 Speaker 1: that makes it more likely that Boris Johnson would compromise 417 00:29:13,840 --> 00:29:16,760 Speaker 1: with the EU? I think it's it's held when I 418 00:29:16,760 --> 00:29:22,200 Speaker 1: spoke to Joe Biden during the week, very warm, clearly 419 00:29:22,440 --> 00:29:24,800 Speaker 1: very proud of his Irish heritage, and it makes no 420 00:29:24,920 --> 00:29:27,840 Speaker 1: secret of that, and we're looking forward to his presidency 421 00:29:27,880 --> 00:29:30,080 Speaker 1: to be frank from that perspective. But in the more 422 00:29:30,120 --> 00:29:34,200 Speaker 1: broader issue is the prospects of a Biden presidency being 423 00:29:34,240 --> 00:29:37,240 Speaker 1: more multilateral in its trust in it and its impulse. 424 00:29:37,600 --> 00:29:39,960 Speaker 1: That was careful my conversation with the President elect that 425 00:29:40,480 --> 00:29:42,560 Speaker 1: he was going to engage with Europe now that could 426 00:29:42,720 --> 00:29:44,880 Speaker 1: That's probably more significant in terms of the impact on 427 00:29:44,880 --> 00:29:47,600 Speaker 1: the UK's response, because it seems to me that the 428 00:29:47,680 --> 00:29:50,840 Speaker 1: United Kingdom values its relationship with the United States and 429 00:29:50,960 --> 00:29:54,280 Speaker 1: vice versa. I think President Biden would too, and so 430 00:29:54,360 --> 00:29:58,200 Speaker 1: therefore I think the US the new presidency would prefer 431 00:29:58,360 --> 00:30:01,360 Speaker 1: a deal between Europe in the UK. I think UK 432 00:30:01,560 --> 00:30:05,960 Speaker 1: is conscious of that, and the president of Lex three 433 00:30:06,320 --> 00:30:08,840 Speaker 1: climate change, I think Boris Johnson would like him in 434 00:30:08,840 --> 00:30:11,040 Speaker 1: Gasgow for example, for the cops. So I can see 435 00:30:11,040 --> 00:30:16,000 Speaker 1: an alignment of of interests here sparked by the President's 436 00:30:16,040 --> 00:30:19,160 Speaker 1: commitment to montinaturalism and to resetting. If you like the 437 00:30:19,280 --> 00:30:21,960 Speaker 1: sets of relationships between the US and Europe that might 438 00:30:22,520 --> 00:30:26,520 Speaker 1: be better, that are wight enhanced, the prospects of a deal, 439 00:30:27,320 --> 00:30:29,560 Speaker 1: weld broaden it out of it. I mean, you say, itself, 440 00:30:29,600 --> 00:30:32,160 Speaker 1: it's going to be a shock when we even if 441 00:30:32,200 --> 00:30:34,560 Speaker 1: you had a deal, it's a big change from what 442 00:30:34,800 --> 00:30:37,160 Speaker 1: we have before. And the deal itself is not like 443 00:30:37,240 --> 00:30:39,800 Speaker 1: it is likely to be quite thin compared to what 444 00:30:39,920 --> 00:30:43,640 Speaker 1: might have been expected. If we're thinking about global cooperation 445 00:30:43,840 --> 00:30:48,520 Speaker 1: and inspiring more negotiation on trade globally, I mean, are 446 00:30:48,560 --> 00:30:51,920 Speaker 1: there any positive lessons from this negotiation for the rest 447 00:30:51,920 --> 00:30:54,760 Speaker 1: of the world or all Are they all negative? I 448 00:30:54,760 --> 00:30:58,000 Speaker 1: think the the important lesson is I don't engage in 449 00:30:58,000 --> 00:31:02,040 Speaker 1: any sort of knee jerk reactions to anything, and don't 450 00:31:02,080 --> 00:31:05,960 Speaker 1: start announcing things or doing things without adequate preparation in advance. 451 00:31:06,120 --> 00:31:08,880 Speaker 1: I mean, these are very very weighty issues. They're complex, 452 00:31:08,960 --> 00:31:12,800 Speaker 1: they have a lot of unintended consequences um and they 453 00:31:12,840 --> 00:31:16,640 Speaker 1: affect people's lives and livelihoods fairly significant as we know. Well. 454 00:31:16,640 --> 00:31:19,160 Speaker 1: I would hope but that the election of President Biden 455 00:31:19,160 --> 00:31:21,760 Speaker 1: as well as that we would move to a more 456 00:31:21,800 --> 00:31:27,440 Speaker 1: open trading prospective. And I think, you know, we're all 457 00:31:27,560 --> 00:31:30,080 Speaker 1: perplexed at times as to what UK would decide to 458 00:31:30,160 --> 00:31:34,720 Speaker 1: leave one of the largest trading blots in the world, 459 00:31:35,440 --> 00:31:38,520 Speaker 1: which has brought about significant economic advancement for all of 460 00:31:38,520 --> 00:31:41,400 Speaker 1: our economies in Europe. So I think our lessons to 461 00:31:41,400 --> 00:31:44,400 Speaker 1: be learned in terms of the basic principles that that 462 00:31:44,480 --> 00:31:49,320 Speaker 1: really power in economy, and I think we need to 463 00:31:49,360 --> 00:31:52,040 Speaker 1: be very conscious of that and reverse any move towards 464 00:31:52,320 --> 00:31:57,240 Speaker 1: protectionism and move towards an open trading environment. Obviously, we've 465 00:31:57,280 --> 00:32:00,640 Speaker 1: had a second wave of COVID coming a US Europe 466 00:32:00,680 --> 00:32:03,520 Speaker 1: in the last couple of months are in high frequency 467 00:32:03,560 --> 00:32:07,360 Speaker 1: indicators of the economy show that that is causing a 468 00:32:07,440 --> 00:32:12,280 Speaker 1: double dick in many economies in terms of activity. How 469 00:32:12,480 --> 00:32:15,440 Speaker 1: hopeful are you that we can have a faster recovery 470 00:32:15,480 --> 00:32:18,040 Speaker 1: this time around and maybe even still see that v 471 00:32:18,200 --> 00:32:22,440 Speaker 1: shape recovery that people have talked about. I think the 472 00:32:22,480 --> 00:32:24,760 Speaker 1: success or otherwise of vaccines is going to be a 473 00:32:24,880 --> 00:32:28,600 Speaker 1: very important story from two dozen twenty one um and 474 00:32:29,320 --> 00:32:31,880 Speaker 1: from the Irish perspective, we we we moved early on 475 00:32:31,920 --> 00:32:35,080 Speaker 1: the second wave, so we're I think the second lowest 476 00:32:35,120 --> 00:32:38,200 Speaker 1: incidents in Europe. Now we're doing very well in terms 477 00:32:38,200 --> 00:32:42,800 Speaker 1: of a downward trajectory of cases, downward in numbers in 478 00:32:42,880 --> 00:32:45,280 Speaker 1: hospital and I see you. I think in the early 479 00:32:45,320 --> 00:32:48,000 Speaker 1: part of the tournament twenty one, depending on the efficacy 480 00:32:48,000 --> 00:32:53,600 Speaker 1: of vaccines as the marriage, I think the by the 481 00:32:53,600 --> 00:32:55,320 Speaker 1: middle of two dozen twenty one, it could be better 482 00:32:55,360 --> 00:33:00,160 Speaker 1: than we might have anticipated. And but I think we're 483 00:33:00,000 --> 00:33:03,160 Speaker 1: we're learning a lot more about the virus that will 484 00:33:03,240 --> 00:33:06,959 Speaker 1: inform how we exit this level five of restrictions and 485 00:33:07,000 --> 00:33:09,800 Speaker 1: how long we can protect livelihoods as well as lives, 486 00:33:10,400 --> 00:33:12,440 Speaker 1: and that's important and to get people back working again 487 00:33:12,480 --> 00:33:17,360 Speaker 1: in certain sectors travel, tourism, aviation, hospitality. Those are the 488 00:33:17,400 --> 00:33:19,720 Speaker 1: sectors that I mean that that have been hardest hit. 489 00:33:20,720 --> 00:33:23,120 Speaker 1: We believe all those sectors can come back much more strongly, 490 00:33:23,160 --> 00:33:27,120 Speaker 1: more quickly. And finally, just to go back to President Biden, 491 00:33:27,120 --> 00:33:29,760 Speaker 1: you said yourself, he's one of the presidents who American 492 00:33:29,800 --> 00:33:33,840 Speaker 1: presidents who is long boasted of his Irish roots. Do 493 00:33:33,880 --> 00:33:37,880 Speaker 1: you think it's impossible that the Irish, the special relationship 494 00:33:37,960 --> 00:33:40,040 Speaker 1: that America has with the European country will be with 495 00:33:40,120 --> 00:33:44,120 Speaker 1: Ireland under President Biden, not the UK. Well, I think 496 00:33:44,280 --> 00:33:46,760 Speaker 1: he values his relationship with the UK, but there's no 497 00:33:46,880 --> 00:33:50,120 Speaker 1: question for my conversation last week, he loves Ireland. He's 498 00:33:50,200 --> 00:33:53,160 Speaker 1: very proud of his Irish heritage. Even in our conversation 499 00:33:53,200 --> 00:33:57,000 Speaker 1: we spoke about his his great grandparents and his grandparents 500 00:33:57,200 --> 00:34:01,120 Speaker 1: home in County leve and in in Mail and I 501 00:34:01,200 --> 00:34:02,520 Speaker 1: said to him, look, we'd like to see you an 502 00:34:02,600 --> 00:34:03,880 Speaker 1: aranand and he said, you're not going to be able 503 00:34:03,880 --> 00:34:06,520 Speaker 1: to start me from coming. El Martin, thank you very much, 504 00:34:07,080 --> 00:34:17,439 Speaker 1: You're very welcome. Indeed, thanks for listening to Stephanomics. We'll 505 00:34:17,440 --> 00:34:19,680 Speaker 1: be back next week with more on the ground reporting 506 00:34:19,680 --> 00:34:22,520 Speaker 1: and analysis on anything we think you might want to 507 00:34:22,560 --> 00:34:25,560 Speaker 1: hear about. Remember you can always find us on the 508 00:34:25,560 --> 00:34:29,040 Speaker 1: Bloomberg Terminal, website, app, or wherever you get your podcasts. 509 00:34:29,360 --> 00:34:31,920 Speaker 1: And for more news and analysis from Bloomberg Economics, you 510 00:34:31,960 --> 00:34:36,560 Speaker 1: should follow at Economics on Twitter. This episode was produced 511 00:34:36,560 --> 00:34:40,840 Speaker 1: by Magnus Hendrickson, with special thanks to t Shop, Michael Martin, 512 00:34:41,560 --> 00:34:47,000 Speaker 1: Larry Summers, rum Rajan Janet Yellen, Lord, Mervin King, and 513 00:34:47,160 --> 00:34:52,040 Speaker 1: Cat Glass. Lucy Meekin is the executive producer of Stephanomics 514 00:34:52,080 --> 00:35:01,120 Speaker 1: and the head of Bloomberg Podcast is Francesca Levi. Four 515 00:35:01,560 --> 00:35:01,600 Speaker 1: th