Why (Most) Economists Got This Economy So Wrong
About this episode
Harvard economist Jason Furman, former chair of Obama's Council of Economic Advisers, tries to explain why so many economists misread the post-pandemic economy. He walks through the great inflation debate of 2021: how the Biden administration's stimulus, supply-chain snarls, and a massive shift from services to goods spending combined to produce the worst inflation in decades — and why forecasters kept expecting it to be 'transitory.' Furman discusses what the episode revealed about the limits of macroeconomic models, the strange 'Great Resignation' labor market, whether the Fed can engineer a soft landing, and how policymakers should reason under uncertainty. It is a candid post-mortem from an economist who got some of it right and some of it wrong.