Financial market volatility has skyrocketed in recent days. The Standard and Poors 500 Index, which consists of the 500 largest, publicly traded corporations, lost 6 percent of its value in May. This was followed by an 8 percent rise in June, but the index was down about 5 percent through August 16 from its July peak. Other stock market indexes recorded similar patterns.

[Subscription Required] It is not easy to predict where financial stresses that require alleviation by the IMF will emerge next, or what form the mitigation strategies will take. Almost certainly, though, after a period of extremely easy liquidity and associated leveraging in financial markets, the call on IMF advice and resources will be greater than in the past. Its support will have to take new forms. It will also have to sell economic-policy packages to a governing body from an increasingly multipolar world.

Richard Epstein and John Yoo take questions from podcast listeners.

We need to solve climate change, but we also need to make sure that the cure isn’t more painful than the disease. Abandoning fossil fuels as quickly as possible, as many environmental activists demand, would slow the growth that has lifted billions of people out of poverty.

Last week Raghu Rajan and I coauthored an article for the Financial Times. We argued that the IMF should no longer continue the tradition that the Managing Director of the International Monetary Fund be a European. Instead, it should “break the mould by appointing the best possible candidate to the job, regardless of nationality,” and “hold an open competition” for the position.

One main component of Franklin Roosevelt’s New Deal was the National Industrial Recovery Act (NIRA), which cartelized hundreds of American industries. If FDR’s goal was, as the name of the act implies, to help industries recovered from the depth of the what would later be known as the Great Depression, the NIRA never made sense. When you cartelize an industry, you cut output and raise prices. With output being so low, you make the situation worse, not better.

Hoover Institution fellow Raghuram Rajan, who predicted the 2008 crash correctly, is not too worried about the risks of a potential recession in the US.

Hoover Institution fellow Lanhee Chen discusses the trade issues between the US and China.