[embedded content] My latest Macro Musing podcast is with Jesus Fernandez-Villaverde. Jesus is a professor of economics the University of Pennsylvania, a research associate with the National Bureau of Economic Research, and a research affiliate with the Centre for Economic Policy Research. Jesus does theoretical macroeconomic modeling, econometrics, and economic history. He has several books coming out on those topics and recently coauthored a chapter in the Handbook of Macroeconomics titled "Solution and Estimation Methods for DSGE Models". He joined me to talk about European economic history and macroeconomic modeling on the show. Most of our conversation focused on German monetary history in the 20th century since it has been so consequential for the rest of the Europe. We
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Update: Since we talked about it in the podcast, here is a chart I created some time ago on the EMS crisis in 1992It shows Germany's tightening of monetary policy pulling down (via the peg) nominal demand in other European countries. It is also shows a recovery in UK nominal spending once the peg was broken.