Ernie Tedeschi on Full Employment, the US Safe Harbor Premium, and the Current Path of R-Star

Ernie Tedeschi is the Director of Economics at the Budget Lab and is a visiting fellow at the Psaros Center for Financial Markets and Policy. Recently, Ernie was a chief economist at the White House’s Council of Economic Advisors, and he is also a returning guest to the podcast. Ernie rejoins Macro Musings to talk about the CEA and some of his recent work on the political risks to the US safe harbor premium and R-star. David and Ernie also discuss the benefits and healing properties of a high employment economy, Ernie’s favorite measures of the labor market, the current and past trends in the path of R-Star, and more.

Transcript for this week’s episode. (www.mercatus.org/macro-musing...)

Ernie’s Twitter: @ernietedeschi (x.com/ernietedeschi)
Ernie’s Budget Lab profile (budgetlab.yale.edu/person/ern...)

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Related Links:

Political Risks to the U.S. Safe Harbor Premium (budgetlab.yale.edu/news/24050...) by Ernie Tedeschi

Recent Movements in [R-star]: The Most Important Interest Rate That You have Never Heard Of (finpolicy.georgetown.edu/wp-c...) by Ernie Tedeschi

The 2024 Economic Report of the President (www.whitehouse.gov/cea/writte...) by the White House Council of Economic Advisers

The Fed Governor Who Proved Larry Summers Wrong (www.wsj.com/economy/central-b...) by Nick Timiraos

Summers, Blanchard Say Waller’s ‘Soft-Landing’ Paper Has Errors (www.bloomberg.com/news/articl...) by Craig Torres

Timestamps:

(00:00:00) - Intro

(00:01:49) - Ernie’s Experience at the CEA

(00:09:15) - The Benefits and Healing Properties of a High Employment Economy

(00:15:28) - Ernie’s Favorite Measures of the Labor Market

(00:20:17) - The Broader Debate Surrounding Labor Market Measures

(00:24:07) - The Basics of a US Safe Harbor Premium

(00:28:56) - Political Risk vs. Exorbitant Privilege

(00:33:46) - Debt Ceiling Crises as a Political Risk Scenario

(00:37:01) - Fiscal Dominance as a Political Risk Scenario

(00:43:25) - Outlining the Distinction Between Different R-Stars

(00:48:39) - Past and Current Trends in the Path of R-Stars

(00:54:46) - Assessing the Sources of High Productivity

(00:58:22) - Outro

[@woodchuck003]

What the hell is Ernie talking about by the attempted to offset the budget deficit.
The budget deficit this year is 1.9 trillion dollars, he proposed a tax that would create $256 billion over 10 years.
That's like saying talking about running a marathon is the same thing as literally running a marathon.

[@auturgicflosculator2183]

No. Just no. No more of these lies.