Paul Krugman

@paulkrugman ↗

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Last Checked May 16, 2022

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Thu Mar 17 18:16:59 +0000 2022

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Paul Krugman @paulkrugman

Expected inflation is very front-loaded; real interest rates over the next year are very negative, but not so much so if we look at the implicit rates starting 1 or 2 years from now. And I'd argue that those are the relevant real rates for investment in structures 13/ — PolitiTweet.org

Posted March 17, 2022

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Paul Krugman @paulkrugman

In that case, the real interest rate that matters isn't the rate over the 10 years starting today; it's the real rate over the 10 years that start *one year from now*. Ordinarily that's not an important distinction. But times are unusual 12/ — PolitiTweet.org

Posted March 17, 2022

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Paul Krugman @paulkrugman

So if you say something like "Interest rates are only 0.25% but inflation is 6, so we have minus 6.25% real interest rates" you're not talking about the real rate that matters, which isn't nearly that low 14/ — PolitiTweet.org

Posted March 17, 2022