Luca Fornaro is a senior researcher at CREI and professor at both UPF and the Barcelona School of Economics. In Luca’s first appearance on the show, he discusses his expansive work on, hysteresis, stagnation traps, endogenous growth, aggregate demand polices, the medium run, population growth and much more.

Check out the transcript for this week’s episode, now with links.

Recorded on April 23th, 2025

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Timestamps:

(00:00:00) – Intro

(00:00:51) – Luca’s Background

(00:03:19) – Hysteresis

(00:7:23) – Why Talk About Hysteresis Now?

(00:10:55) – Stagnation Trap

(00:16:07) – The Medium Run

(00:22:25) – Managing Expectations with Automatic Stabilizers

(00:28:48) – What About Population Growth?

(00:31:47) – The Empirical Side

(00:39:24) – Directing Capital Flows

(00:42:30) – The Scars of Supply Shocks

(00:48:57) – The Nominal GDP Targeting Solution

(00:51:28) – Fiscal Stagnation

(00:59:21) – Outro

Luca Fornaro on Hysteresis, Endogenous Growth, and Aggregate Demand Polices

Macro Musings with David Beckworth