The seeds of a newly published book memorializing eminent economist Allan Meltzer sprouted from the Mercatus Center’s Macro Musings podcast.
Titled Reflections on Allan H. Meltzer’s Contributions to Monetary Economics and Public Policy, the book contains eleven essays on the work and influence of one of the leading monetary economists of the 20th century. The book was edited by David Beckworth, senior research fellow at the Mercatus Center at George Mason University, and host of Macro Musings.
The interview that inspired this new book was recorded in November 2016.
“Allan Meltzer agreed, graciously, to join me for a podcast in front of a live audience, and this was just about six months before he passed away,” Beckworth said. “Honestly, I wasn’t sure how it was going to unfold and happen, but he was incredibly sharp, witty—everyone was laughing. In fact, you can go online and listen to this podcast and you can hear the laughter from the audience. It really was a great time.”
During a panel discussion on October 10 at the American Enterprise Institute (AEI), “Monetary policy in the 21st century: An Allan Meltzer Perspective,” Beckworth fondly recalled “one example of his wit” from the interview.
During the podcast, Meltzer described how Federal Reserve Chairman Paul Volcker had delivered a “body blow” to rampant inflation by tightening monetary policy amid high unemployment.
“No one before him had ever done anything like that, and the markets said, ‘This guy is really serious. He’s going to stop the inflation.’ And three, four months later, the inflation rate was down to three or four percent. He convinced them. He was persistent, and that was just a great thing for the country, for the world and for monetarism,” Meltzer said.
According to monetarist economic theory, long-term inflation is caused by a failure to adequately control the money supply.
“The Fed has never liked the idea of controlling money,” Meltzer continued, “and they got rid of the idea of monetarism as quickly as they could after that, and so they make terrible mistakes, and they’re making terrible mistakes in this recovery.”
Beckworth asked: “Would you consider that the height of the monetarist counterrevolution, when Volcker did his thing?”
“That’s the short-run high. We’ll be back,” Meltzer joked, noting that the monetarist lens comes into vogue when inflation arises.
Beckworth recalled that Meltzer was “very confident, very witty, and he was a lot of fun to have on the show.”
Meltzer died on May 8, 2017, at age 89.
The Mercatus Center organized an academic conference in his honor in January of 2018, and the new book arose from the event’s presentations. The book was produced by the Mercatus publications team and monetary policy program, and published by the Hoover Institution Press.
“We’re really happy about the book, proud of it, and hope you’ll take a look at it,” Beckworth told the AEI audience.
The book includes an introduction by Beckworth and a transcript of the Macro Musings interview.