How Should the Fed Respond to Supply Shocks? | Steven J. Davis, Austan Goolsbee | Hoover Institution

About this episode

Chicago Fed President Austan Goolsbee joins Steve Davis to discuss his recent speech on how central banks should respond to supply shocks. Goolsbee argues that the Fed should not simply “look through” supply shocks but should instead treat them as persistent or recurring and, hence, as a call for tightening by the Fed. The discussion ranges widely from oil shocks and inflation in the 1970s to supply-chain disruptions and tariffs in the 2020s. They also discuss wage stickiness and its implications for monetary policy. ABOUT ECONOMICS, APPLIED Economics, Applied brings together top leaders and researchers to break down key economic developments, offering evidence-based insights and practical…