Gita Gopinath on Trade, Currencies, and Economic Transformation

Gita Gopinath has spent the last several years inside the room where the world's monetary plumbing gets fixed — or doesn't. As first deputy managing director of the IMF and, before that, the Fund's chief economist, she worked on sovereign debt restructuring, followed Argentina's disinflation up close, and built her academic reputation on ideas like dollar dominance and the dominant currency paradigm. Now back at Harvard launching a new Global Economics Lab, her conversation with Tyler ranges from why exchange rates don't adjust the way models predict, to what stablecoins really cost, to whether AI's growth dividend will show up on schedule. Tyler and Gita discuss why trade balances are only weakly related to real exchange rates, before turning to Argentina, Milei's fiscal discipline, the peso, and dollarization. Then they discuss whether economists got the euro wrong; whether trade imbalances with China are really the problem; stablecoins, CBDCs, and the Treasury market; and whether AI will ease the debt burden, cause stagflation, or transform economics itself. Finally, they turn to her family's Kerala roots: why the state keeps electing communists, the relationship between matriarchy and social indicators, single-sex education, and what she's building next. Read a transcript enhanced with helpful links, or watch the full video on YouTube. Recorded August 27th, 2026. Other ways to connect Follow us on X and Instagram Follow Tyler on X Follow Gita on X Sign up for our newsletter Join our Discord Email us: cowenconvos@mercatus.gmu.edu  Learn more about Conversations with Tyler and other Mercatus Center podcasts here. Timestamps: 00:00:00 - Intro 00:00:57 - On why currencies don't adjust the way models predict 00:15:46 - On Argentina after triple-digit inflation 00:26:05 - On living with the euro 00:28:50 - On China's problematic surpluses 00:34:02 - On digital currencies 00:39:33 - On AI and the productivity question <p class= "e-10750-text encore-text-body-medium encore-internal-color-text-subdued EeWgdu