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University of Chicago Austin Goolsbee Talks COVID Economics: AD Q&A Podcast

“The number one rule of virus economics”, economist Austan Goolsbee says: “If you want to help the economy, you have to get the virus under control.”

In the first half of 2021, when COVID appeared to be abating, the economic signs were good. But “Delta and Omicron have halted that progress and indicators are pointing down as Omicron’s impact continues. When the data comes out for January, there will be a slowdown,” says Goolsbee, an economics professor at the University of Chicago Booth School of Business and former economic adviser to President Barack Obama, on the latest episode of the AD Q&A Podcast.

“Consumer spending, which had been fairly strong, fell almost 2% this month. That’s quite a dramatic shift on a monthly basis. This was before omicron peaked. I would think we’re going to get a slowdown through the next few dates.” (Click the image below to listen.)

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It was made for a fascinating and unprecedented time to study economics. No previous recession has proved a good comparison. On the one hand, traditionally recession-proof services such as visits to the dentist or doctor collapsed. People instead spent their money on goods like televisions and refrigerators.

From Austin Goolsbee:

How to think about the COVID recession

The missing data in the inflation debate

In today’s podcast, Goolsbee discusses inflation concerns, the next steps for the Federal Reserve, the impact of America’s bailout plan and why – despite the exposed holes in the nation’s safety net – Build Back Better isn’t taking off.

But Chicagoans are perhaps most curious about his thoughts on the future of cities and their workers. He predicts that those who fled to the suburbs will return: “If you get the census data – it goes back to 1790 or so – urbanization has been going from the time of the ‘Hamilton’ musical to now increasing every ten years. This applies not only to the United States, but to all rich countries.

“We’re more productive when we’re together. wages are higher. We get ideas from each other. That’s why cities are as rich as they are. This was a tremendously unusual two-year period in which people left urban areas for rural areas. I think five years from now, when the job market is different from what it was at this bizarre moment, those who have left the office will, at the first sign that the person coming into the office is the one being promoted or doing business power, have higher salaries, do it Come back.”

But in big cities like Chicago, crime must be brought under control so defectors can return. Tune in to hear how Goolsbee thinks about how his neighbor Arne Duncan, former Obama White House colleague, would fare as mayor.

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