By Bilal Hafeez 04-09-2020

Ep. 26: Professor Laura Veldkamp On How the COVID Shock Will Lower Growth For Decades

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Macro Hive Conversations With Bilal Hafeez
Ep. 26: Professor Laura Veldkamp On How the COVID Shock Will Lower Growth For Decades

You can listen to the podcast on Apple or on Spotify.

In this episode, I talk with Professor Laura Veldkamp. Laura presented one of the key papers at the Federal Reserve’s 2020 gathering at Jackson Hole. Her paper co-authored with Julian Kozlowski and Venky Venkateswaran on ‘Scarring Body and Mind: The Long Term Belief Scarring Effects of COVID-19’ will likely be viewed a seminal paper in years to come. Laura is a Professor of Finance at Columbia University’s Graduate School of Business and a co-editor of the Journal of Economic Theory. She’s a frequent consultant for the New York and Minneapolis Federal Reserve Banks. She is also the author of the textbook, Information Choice in Macroeconomics and Finance.

In this podcast we discuss:

1. Importance of the knowledge economy
2. How alternatives to rational expectation models need to be used when dealing with tail events
3. The critical role of the reactions and belief scarring from events like pandemics
4. Why the long-term costs of COVID will be ten times larger than the current year costs
5. How safe haven assets will be in even more demand, which will keep rates low
6. The role of data accumulation in economies
7. The limits of big data
8. A book that influenced Laura: Guns, Germs and Steel


You can follow Laura’s work at her university homepage.


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(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)