The New Bazaar

This is a special episode from the podcast Macro Musings, hosted by economist David Beckworth. David interviews Cardiff along with Heather Long of the Washington Post and Ryan Avent of The Economist about their reflections on the last three years. What they got wrong, what they got right, what shocked them, and what the lessons of these extraordinary, tumultuous times herald for the future.

Joining Cardiff for this episode is Avi Goldfarb, Rotman Chair In Artificial Intelligence and Healthcare At The Rotman School Of Management, University Of Toronto, and the co-author (with his fellow economists Ajay Agrawal and Joshua Gans) of an excellent new book, "Power and Prediction: The Disruptive Economics of Artificial Intelligence".In their chat, Avi and Cardiff discuss:Why AI is best understood as a "prediction technology"Examples of AI already in useWhich parts of the economy could be transformed by AI, and howHistorical analogies to previous eras of widespread technological disruptionHow AI will change the way people and companies make decisionsWhy this change will shift institutions away from blunt rules and towards individual discretionIn the labor market, who will gain and who will lose from the adoption of AIWhat the use of AI might teach us about what it means to be humanAnd all throughout the chat, they look at the fundamental question of whether artificial intelligence is about to make the economy—and the world—a whole lot weirder. And if so, just how far along that path to weirdness are we already?Related links: "Prediction and Power", by Ajay Agrawal, Joshua Gans, and Avi Goldfarb"The impact of AI on the future of workforces", The White House CEA and the European Commission“Before the Flood”, by Sam Hammond"The golden age of AI-generated art is here", by Tom Faber"Historical analogies for large language models", by Dynomight Internet Website

This is a special, between-the-seasons episode of the New Bazaar.Right now, the white-to-black wealth ratio in the United States is roughly 6 to 1. Which means that when you add up all the wealth that someone can own—their cash, the value of their house, their investments in the stock market, and so on—the average White American has six times the wealth of the average Black American. That figure alone should be disturbing enough. But making it even worse is that this wealth ratio of 6 to 1 is about the same as it was back in the 1950s, seven decades ago. Some of the reasons for this long-term persistence of a big racial wealth gap are probably familiar to anyone who knows even just a little about American history. Not just the history of slavery, but also what came next: Jim Crow and segregation, the numerous racist laws and policies that were passed, and the history of racial violence—all of which made it impossible for Black Americans to accumulate as much wealth, and to get the same return on their wealth, as White Americans. Maybe less understood is another cause. If you consider the immediate aftermath of emancipation and the Civil War as a starting point, Black Americans simply began with much less wealth from which to build more wealth—and that initial difference has continued to have a big lingering effect even a century and a half later. These are just some of the conclusions in a new working paper from today’s guest, Ellora Derenoncourt, and from her co-authors Chi Hyun Kim, Moritz Kuhn, Moritz Schularick. Ellora is an economist at Princeton University, where she is also founder of the Program for Research on Inequality. On this episode of New Bazaar, Cardiff speaks with Ellora about this fascinating paper and about some of her other related work. Related links: Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860-2020Can You Move to Opportunity? Evidence from the Great MigrationMinimum wages and racial inequality