Paul Krugman

@paulkrugman ↗

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Last Checked July 1, 2022

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Sun May 15 13:58:17 +0000 2022

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Paul Krugman @paulkrugman

One answer is that when a wage (or price) setter has market power, small deviations from the profit-maximizing price have only second-order effects on profits 13/ https://t.co/xkQtGAGULS — PolitiTweet.org

Posted May 15, 2022

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Paul Krugman @paulkrugman

Many economists who study the evolution of wages — for example the Great Compression of the 1940s, which lasted for decades — end up invoking the role of “norms”. But how can these matter in the face of supply and demand? 12/ — PolitiTweet.org

Posted May 15, 2022

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Paul Krugman @paulkrugman

This in turn implies that seemingly small considerations — like fear of customer or political backlash — can inhibit firms from charging or paying what the traffic will bear. E.g., firms don’t cut wages in recessions bc they worry about morale 14/ — PolitiTweet.org

Posted May 15, 2022