Paul Krugman

@paulkrugman ↗

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Last Checked July 20, 2022

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Tue Jun 21 18:45:54 +0000 2022

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Paul Krugman @paulkrugman

It's a real slog to read, but Phelps argued that with staggered wage and price setting, persistent inflation would become self-perpetuating. Here's the key passage 4/ https://t.co/PPQrZ0uop9 — PolitiTweet.org

Posted June 21, 2022

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Paul Krugman @paulkrugman

The ur-reference here is the 1968 Phelps paper on inflation — actually a better model although much worse writing than the famous Milton Friedman analysis — about how expectations could get "built in" 3/ https://t.co/Im9M7k3gQm — PolitiTweet.org

Posted June 21, 2022

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Paul Krugman @paulkrugman

Notice that this is actually a wage-wage spiral, not a wage-price spiral. Anyway, the point is that once you're there you need to break the spiral somehow to get inflation down — say, with a massive multi-year Volcker-type bulge in unemployment 5/ — PolitiTweet.org

Posted June 21, 2022