October 16, 2023· 48 min

How An Old Banking Regulation May Have Driven The 1970s Inflation

Itamar Drechsler

Orality

Model

50%

Speaker Breakdown

HostTracy Alloway(2,439 words)

M:94%

HostJoe Weisenthal(1,656 words)

M:29%

GuestItamar Drechsler(5,156 words)

M:28%

Oral Indicators

Agonistic33%

literally, completely, obviously

Engagement61%

you, our, your

Memory Aids100%

listen, now, well

Repetition100%

like (114x), they (93x), it's (72x)

Parallelism86%

And I'm Tracy Alloway...., So gas prices are starting to ..., But I think, generally, there ...

Sound Patterns54%

55 question(s), alliteration: "markets move", alliteration: "barclays brief"

Formulaic Phrases8%

you know what, i mean, the thing is

Literate Indicators

Hedging8%

could, possibly, quite

Passive Voice10%

was when, was when, been licked

Abstract Nouns16%

investment, recommendation, inflation

Subordination9%

because, though, until

Sentence Length40%

Avg: 14.9 words/sentence

Word Complexity47%

investment, analyze, anticipate

Academic Markers6%

according to, the literature

Impersonal Style39%

623 personal pronouns found

Descriptive Style88%

literally, completely, obviously

Description

There remains a lot of anxiety over whether inflation in the US will gather steam all over again. Part of this worry stems from the fact that there were multiple bouts of inflation in the 1970s, which was the last time the US had a serious inflation problem. So to understand whether our current environment bears similar risks to that of the 70s, it's important to understand what actually drove inflation during that period. On this episode, we speak with Itamar Drechsler, a finance professor at Penn's Wharton school. He argues that the banking regulation known as Reg Q impaired the transmission of monetary policy, and resulted in a perverse dynamic via which rate hikes served to impair the supply side of the economy, rather than cool the demand side. See omnystudio.com/listener for privacy information.

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