On Thursday, March 10, Alexi Savov and Itamar Drechsler joined Markus’ Academy for a lecture on Investing in a High Inflation Environment. Savov is an Associate Professor of Finance at New York University’s Stern School of Business. Drechsler is the Ervin Miller-Arthur M. Freedman Professor, Professor of Finance and Co-Director of the Rodney L. White Center for Financial Research at the University of Pennsylvania, Wharton. Introductory remarks by Markus Brunnermeier.
Timestamps:
[0:00] Introductory Remarks
[8:33] Asset and Inflation Theory 101
[18:22] Why did stocks struggle during the Great Inflation?
[27:12] Regulation Q
[33:07] Credit Crunches and Stagflation
[44:39] Credit Crunches and the Stock Market
[48:20] Fears for now and future?
[49:36] The Fed, Inflation, and the Fed Put…(read more)
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Great talk. Nice Brady Bunch moment at 1:08:30.
Drechsler, Itamar and Savov, Alexi and Schnabl, Philipp, The Financial Origins of the Rise and Fall of American Inflation (February 15, 2020). NYU Stern School of Business, https://ssrn.com/abstract=3538569
If these guys are correct about reg Q, credit restriction, and stagflation, doesn't that change monetary history? Meaning we need to rewrite the college textbooks to explin, well that dreadful Milton Friedman to Paul Volker era was the result of a simple and stupid policy mistake? Our government unintentionally created a series of gratuitous credit crunches
Fascinating interview.
very fascinating, thank you for this!
The stock market has been a really tough one this past months, but I watched an interview on CNBC where the anchor ‘Jim Cramer’ kept mentioning "…MARISSA SAPONARE…". This prompted me to get in touch with her, and from October 2021 till now we have been working together, and I can now boast of $540k in my trading portfolio.
Thanks.
very interesting and in depth. thank you
The very negative real interest rates of today are financial repression on steroids. It’s amazing how docile markets are – especially the bond market. Given the very high levels of government debt one wonders how far away we are from a monetary regime of fiscal dominance.