Dwarkesh Podcast
“China is digging out of a crisis. And America’s luck is wearing thin.” — Ken Rogoff
12 Jun 2025
Ken Rogoff is the former chief economist of the IMF, a professor of Economics at Harvard, and author of the newly released Our Dollar, Your Problem and This Time is Different.On this episode, Ken predicts that, within the next decade, the US will have a debt-induced inflation crisis, but not a Japan-type financial crisis (the latter is much worse, and can make a country poorer for generations).Ken also explains how China is trapped: in order to solve their current problems, they’ll keep leaning on financial repression and state-directed investment, which only makes their situation worse.We also discuss the erosion of dollar dominance, why there will be a rebalancing toward foreign equities, how AGI will impact the deficit and interest rate, and much more!Watch on YouTube; listen on Apple Podcasts or Spotify.Sponsors* WorkOS gives your product all the features that enterprise customers need, without derailing your roadmap. Skip months of engineering effort and start selling to enterprises today at workos.com.* Scale is building the infrastructure for smarter, safer AI. In addition to their Data Foundry, they recently released Scale Evaluation, a tool that diagnoses model limitations. Learn how Scale can help you push the frontier at scale.com/dwarkesh.* Gemini Live API lets you have natural, real-time, interactions with Gemini. You can talk to it like you were talking to another person, stream video to show it your surroundings, and share screen to give it context. Try it now by clicking the “Stream” tab on ai.dev.To sponsor a future episode, visit dwarkesh.com/advertise.Timestamps(00:00:00) – China is stagnating(00:25:46) – How the US broke Japan's economy(00:37:06) – America's inflation crisis is coming(01:02:20) – Will AGI solve the US deficit?(01:07:11) – Why interest rates will go up(01:10:55) – US equities will underperform(01:22:24) – The erosion of dollar dominance Get full access to Dwarkesh Podcast at www.dwarkesh.com/subscribe
Full Episode
Today, I'm speaking with Ken Rogoff, who is a professor at Harvard, author recently of Our Dollar, Your Problem, former chief economist at the IMF. Ken, thanks so much for coming on the podcast.
Thanks so much for having me. And welcome to Harvard, which is where we're filming this.
In your book, you have a lot of anecdotes of meeting different Chinese leaders, especially when you were chief economist at the IMF. And it seems like you had positive experiences. You met the premier with your family, and he would listen to your advice. So, one, how does that inform your view about how competent their leadership is?
And two, how do you think they got into this mess with their big stimulus or whatever else you think went wrong to the extent that when you were talking to them in the early 2000s, it seemed like, you know, you were kind of seeing eye to eye or they would understand your perspective. Do you think something changed in the meantime?
Yeah.
Well, I first want to be careful to say they listen to everybody. I mean, the Chinese are way better than we are of sort of hearing a hundred different views. Mine would be one of many, many, many that they heard. So I was very impressed by the competence of the Chinese leaders. So I actually gave a lecture in their party training school, where if you're a mayor, you're a provincial governor,
you're any bureaucrat on your way up, you go to this thing, which for them is like Harvard Business School. They really looked for competence. So of course there were various loyalty things, but you meet the leaders. I met a lot of them. And when I was at the school, I met a whole bunch of people. They actually asked really raw questions too. They said things like,
I couldn't believe it that they were asking. And I was told, you know, within the school, you're allowed to say anything. So they had the system for a long time. And when you met Chinese technocrats or even, you know, so the mayor of Shanghai or... They were impressive. I'm not saying ours aren't, but it's a mix. I mean, I think you know that. And then Xi Jinping has really changed that.
So he's been the president since 2013, and he's over time pushed out this system and gone more to loyalists and people who are less technocratic. I actually, probably the most important talk I ever did in China was to what's called the China Development Forum in 2016.
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