The 2020s have already delivered one of the strangest economic decades in modern history. We unpack how the pandemic reshaped work, inflation, housing, consumer behavior, and even the way economists think about recessions. We debate whether the pandemic or AI will ultimately define the decade, revisit the policy decisions that still shape the economy today, and talk through why everything from used cars to mortgage rates suddenly felt upside down. Along the way, we explore why the economy has seemed surprisingly resilient despite nonstop shocks, disruptions, and uncertainty. In this episode, we talk about: * Whether the pandemic or AI will be remembered as the defining economic event of the 2020s * Inflation, stimulus policies, tariffs, and the strange post-pandemic economy * How housing, work-from-home, and consumer habits permanently changed * Why the 2020s economy has felt unusually weird and unpredictable If you liked this conversation, you might also enjoy This Week’s Drinks 🍻 Jadrian cracked open a Hardywood Pils, leftover from an end-of-semester cookout with his TAs. He almost grabbed the PBR x Grillo’s Pickle Beer, but decided to save that adventure for a future episode. Matt went with a Hammerhead IPA from Big Oyster Brewery, a West Coast-style IPA brewed with six hop varietals for an intense citrus and grapefruit character with notes of pine. Name That Stat 📊 We originally planned to talk about the economics of higher education, so Jadrian brought in a stat on the number of graduate programs in the U.S., which has grown by roughly 69% since the early 2000s. But once we decided to launch our “economics by the decade” series, Matt pivoted to one of the defining economic indicators of the 2020s: the inflation rate that peaked in June 2022 at its highest level since the early 1980s. Show Notes We’re kicking off a new series that looks back at the biggest economic stories of every decade, starting with the 2020s and working backward through history. We’re taking a shot at making sense of the economic chaos of the 2020s. Honestly, “chaos” might undersell it a little. It should be no surprise that we start with the pandemic, which instantly disrupted employment, supply chains, education, consumer habits, and everyday life. But twenty years from now, will we remember the pandemic as the biggest story, or will the introduction of generative AI ultimately eclipse it? Perhaps the most common theme of the episode is how weird the economy has behaved this decade. Historically, recessions, unemployment, inflation, and growth tended to move together in more predictable ways. The 2020s constantly break those expectations. One easy example: the NBER determined that the pandemic recession officially lasted only two months, even though the traditional shorthand definition of a recession involves two quarters, or six months, of decline. Of course, the disruption lasted much longer than two months, which allowed educators the chance to explain the ways economists define and measure different indicators. The 2020s also included large spikes in inflation without the kind of sustained unemployment that economists might typically expect. The decade saw regional bank collapses, sweeping tariffs, and repeated uncertainty, but markets often just kept chugging along. Even the stock market wasn’t immune to the weirdness. There were also some pretty big policy decisions this decade, not all of which have been consensus picks. A lot of people would argue that the earliest rounds of pandemic relief were necessary to prevent economic collapse, while later stimulus packages may have contributed to inflation once the economy had already stabilized. But did policymakers really know the economy was in a good place at the time? Maybe not. There was no serious economic justification for imposing widespread tariffs on our trading partners, notwithstanding that tariffs are almost universally disliked by economists. One takeaway for listeners is that nearly every major decision of the decade came with enormous trade-offs and very little certainty. Not to be left out, but housing and consumer trends were also contenders for the defining stories of the decade. Ultra-low pandemic-era mortgage rates locked many homeowners into staying put, while newer buyers suddenly faced dramatically higher borrowing costs. Meanwhile, consumers saw a massive uptick in online ordering, curbside pickup, delivery apps, and mobile-first shopping experiences that never really disappeared afterward. In many ways, the 2020s feel like a decade where the economy keeps absorbing shocks that would have seemed unimaginable only a few years earlier. And somehow, despite all of it, things keep moving forward, even if nobody is entirely sure what “normal” is supposed to look like anymore. So tell us: what did we miss? What do you think will define the 2020s economically? And which decade are you most excited for us to cover next? Leave a comment and let us know how wrong we were. Pop Culture Corner 🍿 While it’s not a traditional pop culture contribution, Jadrian shared a book recommendation: Financial Diaries by Jonathan Morduch and Rachel Schneider. The authors draw on the lives of 235 low- and middle-income families over the course of a year, using those diaries to challenge popular assumptions about how Americans earn, spend, borrow, and save. The book highlights how income volatility, not just low income, creates financial stress for many working families. Matt has recently been working on expanding his pop culture reach across new disciplines, including political science and accounting. His contribution this week included a classic scene from Office Space, where “The Bobs” are brought in to audit Initech. The second clip comes from a project on helping accounting professors teach their courses. In the following scene from The Office, Michael Scott puts discount tickets randomly into boxes. The accounting question: how does that liability factor onto the balance sheet? Have a question or topic idea? Reply to this email or drop it in the comments! This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.econhappyhour.com
