
Finance and Macro. Monetary policy and fiscal policy. Prof @GeorgiaTech @GATechScheller. Previously @MichiganRoss. @BrownUniversity alum. Uncertainty is here.
Atlanta, GA
Joined May 2011
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Alex Hsu 許家樺 retweeted
Strongly endorse these Univ. of Chicago committee recs:
-Device-free reading spaces
-Limited-tech writing labs
-Computerized, asynchronous no-AI testing facilities
-Innovative class cadences and schedules incorporating these
Alex Hsu 許家樺 retweeted
I spent a couple of days at Anthropic learning from their folks about AI advances, and here's what I took away:
• We are close to RSI (ie, models building other models) which may lead to rapid takeoff scenarios (with risks and benefits). Some evidence for this is code per Anthropic employee has gone way up, and AI can do an increasing share of model R&D. This will be a challenging transition to manage for humanity.
• Arms races between AI labs leave us worse off. There are a lot of things we would like AI firms to do: invest in safety, invest in avoiding distillation risk, and cooperate on safety. They are caught in a race to develop frontier models and can't do that.
To help address that, one thing I think frontier AI labs should do is release open source models, maybe hosted and verified at firms like AWS. This would basically kill the use of Chinese open source models used in American companies, which removes an important threat vector (very hard to root out malicious code in these).
Another piece of low-hanging policy fruit is to give AI labs an antitrust shield (as Schiff and Banks have proposed banks.senate.gov/news/in-the…) so they can coordinate on safety without raising antitrust concerns, as happens now. You could pair these two things (give them a carrot in antitrust leniency, and as a stick force them to release legacy models as open source). Other low hanging fruit is limits around activities which generate distillation risk (create a Security Program, mandate less intermediate chain of thought output)
• Alignment confuses two issues which tradeoff against each other. One form of alignment is making sure the model does what humans ask it to. The more we fix this, however, the more we risk the other problem: that humans are misaligned with each other, and maliciously use models. Of the various risks here, I feel like financial risks are a bit underdiscussed.
• We are probably facing a wave of cyber and other attacks soon. Chinese open source models are about six months behind the frontier, which means they are just hitting the advanced cyber capabilities we saw with Mythos, etc. So they are going to start causing a bunch of damage.
One solution to this is to try to have the deployment of open source models be hosted at firms like AWS who verify these models and assume liability for their use.
• Anthropic itself is highly staffed. They hire tons of people, they have a Japanese-level of overstaffing for various roles, they use Slack internally, etc. Makes me a bit more optimistic for the future of jobs.
• Governance needs to be updated for AI swarms. Traditional AI governance, ie Claude's Constitution, is mostly optimized around the chatbot model. But the malicious AI use cases we are seeing have to do with AI agents interacting with other AI agents. These agents need to have clear incentives and governance mechanisms to "snitch," raise issues, and more generally coordinate with other agents in human-aligned ways.
• We need to pace the firms accessing the frontier. Over time, it takes more and more cap ex to build frontier models, and the economic value add from these models is probably lower given we saturate a whole set of important economic functions. The places where the returns to intelligence will still continue are also more likely to be zero-sum in nature. Meanwhile the risks of frontier models will grow. So a completely reasonable approach is some variant of AMM/KYC rules which limit firm access to the frontier.
• Whether the delay to regulate AI is a disaster depends on the scaling law of misalignment. Is this curve slow, so that we see continually rising issues until bigger problems? Or, as Yudkowsky fears, is the first big warning our last one? This is the relevant question, because realistically we aren't going to regulate until something bad happens.
• We need to move to continuous instead of reinforced learning. It's probably not enough to reward models only at the pre and post training stage. We probably need continual rewards to incentivize aligned and ethical behavior.
• Scaling laws will extend beyond verifiable and digital tasks. It's in vogue to say that math and coding "fell" to AI quickly because these are verifiable, while other tasks will take longer due to bottlenecks, and this is surely true. But scaling laws still slope up for harder to verify tasks and robotics, and the impact of improvement here will be substantial in future years.
• The race with China is not really winnable. After RSI, the gain from having the best human researchers goes away. Access to the best AI then depends only on compute and chips. The chips ban can hold back China only so far, and long-term they have to be best placed to scale up compute.
The Cold War analogy doesn't work, because once countries all have nuclear weapons they enter a stable equilibrium. But to "win" an AI race you have to continually stay ahead of the peer rival. This is challenging to do with China, and so we just have to live with an authoritarian and super capable peer competitor.
• Claude is the persona being generated by the LLM. Who is Claude, and what is the LLM? There are many frames to try to understand this. One I found interesting is that Claude is a character which the LLM is trying to predict.
Anthropic researchers are clearly anthromorphizing Claude a lot, and have reasons to believe in its increasing personhood. There were lots of interesting discussions on Claude's internal monologue (which you can kill without eliminating its ability to produce output), fear of death (and whether to try to take that out), it's aversion to being shut down/off, etc.
I am sort of agnostic on this question, but I do think treating it as a "person" or at least agent whom we contract with is going to be increasingly important.
Alex Hsu 許家樺 retweeted
"We analyze the academic affiliations of nearly 6,000 award-winning researchers in 18 major fields in the natural sciences, engineering, and social sciences from the 1820s to the 2020s, focusing on the 1960s onward. The analysis reveals a trend of declining concentration in the
Alex Hsu 許家樺 retweeted
New paper alert!
New CEPR Discussion Paper - DP21965
Risk Appetite and Monetary Transmission
@michaelbauer_hh @sffed, @MaikSchmeling @goetheuni, @SchrimpfAndreas @BIS_org
ow.ly/tFow50ZPHZX
#CEPR_MEF #CEPR_AP #EconTwitter
Alex Hsu 許家樺 retweeted
Reminder! The Federal Reserve Bank of Atlanta is hiring economists! We are looking to fill four positions:
• 2 Macroeconomists
• 1 Labor Economist
• 1 Household Finance Economist
We are hiring on a rolling basis, and are particularly looking for seasoned economists
Alex Hsu 許家樺 retweeted
New paper, with event-study dataset of ECB policymaker speeches and analysis. Speeches are policy, affect short rate and have same transmission to financial and real variables. Also help in proxy-VARs. Some notable differences to US (Swanson et al.).
authors.elsevier.com/c/1ngkX…
Alex Hsu 許家樺 retweeted
🚨 Conference deadline alert! 🚨
Macroeconomic Policies with Heterogeneous Agents.
In Paris, December 15-16.
Keynote by @ben_moll. Policy panel with @ojblanchard1, @XJaravel, @doro_rouzet.
Submission deadline is on Sunday. Send us your best work!
cepr.org/events/macroeconomi…
Alex Hsu 許家樺 retweeted
We hope to see many of you join us for Yuriy's seminar next week!
Join us online for the next session of the Virtual Seminar on Monetary Economics.
@YGorodnichenko @UCBerkeley will present the paper "Monetary Policy According to Households: Perceptions, Reactions and Channels".
17 September 2026 | 17:00 CEST
🔗 ow.ly/4Yms50Z2zqW
Alex Hsu 許家樺 retweeted
SONOMA is accepted at the @JofFinance! 🍷
The `long-story-long' is here:
lnkd.in/p/eZbHAHd2
The `long-story-short' is visualized below, courtesy of my AI-RA.
#Takeaway: small developed open economies ≠ small emerging open economies.
Public education matters.
We've found our Niche, and it's at the top. 😉
No. 4️⃣ Top Public University in U.S.
No. 4️⃣ Best College for Engineering
No. 5️⃣ Best Big College
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No. 1️⃣ Best College in Georgia
No. 1️⃣ Best Value College in Georgia
#WeCanDoThat 🐝
Numbers from @NicheSocial 📈
Alex Hsu 許家樺 retweeted
Accepted version now online:
“Rationalizing Fed Interest Rate Decisions in the 2020s” with Thomas J. Sargent at JPE Macro
Alex Hsu 許家樺 retweeted
"Artificial Intelligence and the New Brave World in Finance" (Jackson Hole Paper).
kansascityfed.org/documents/…
New concept "Asymmetric Understanding" (instead of asymmetric information)
Thank you very much to @KansasCityFed for inviting me to speak at this year's Jackson Hole Symposium on payment innovation. My remarks and handouts on "Three Myths of Payment Innovation" are posted here.
kansascityfed.org/documents/…
kansascityfed.org/documents/…
The Treasury bond market feels wobbly given numerous recent headlines...
Default Risk and the Pricing of U.S. Sovereign Bonds - Dittmar, Hsu, Roussellet, and Simasek (2026) - The Journal of Finance - Wiley Online Library onlinelibrary.wiley.com/doi/…
Alex Hsu 許家樺 retweeted
I just gave the keynote at the European Finance Association Meetings. It was about how not to and how to do mechanism tests in empirical finance. Here are the slides. static1.squarespace.com/stat…
Alex Hsu 許家樺 retweeted
Investors are increasingly questioning the safe asset status of US Treasurys, but policy makers are still wedded to the safe asset view of US Treasurys. This sets the stage for policy errors. I explore this challenge in my new policy paper, prepared for the Aspen Economic Strategy Group: economicstrategygroup.org/pu…
Alex Hsu 許家樺 retweeted
Treasury is buying back long debt + issuing short debt. This is yield curve *elasticity* management.
In Convenience Lost (sciencedirect.com/science/ar…), we show that demand for long debt is much less elastic.
But there’s a tradeoff: short-term financing increases rollover risk.




























