Paul Krugman

Paul Krugman @paulkrugman

On its prime issue, the GOP has nothing to offer https://t.co/YLsHdrQTCv — PolitiTweet.org

Paul Krugman @paulkrugman

Thread — PolitiTweet.org

Paul Krugman @paulkrugman

We should also consider the effects of recessions abroad, especially in Europe. Trade likely to be a significant drag going forward 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

The traditional number has been eight quarters — yes, two years, because changing suppliers takes a lot of time. Here's the historical relationship between net exports and an 8-quarter lagged real exchange rate 2/ https://t.co/YEcveTQ8PZ — PolitiTweet.org

Paul Krugman @paulkrugman

All of the rise in GDP, and then some, was accounted for by a smaller real trade deficit — which seems odd given a sharply rising US dollar, which makes US producers less competitive on world markets. But there are long lags in the effects of exchange rates on trade 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

So while this report made all the people who screamed "recession!" look as foolish and partisan as they were, it was not, if you look under the hood, a sign that the worst is over. I hope the Fed is paying attention 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

So there's probably a significant amount of housing contraction still ahead. And real net exports were actually less negative in 2022Q3 than in 2022Q4; this isn't sustainable given the surging dollar, which will hit trade flows but with a long lag 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

It's useful to compare the latest numbers with 2021Q4, before the tightening began. Real residential investment is down 12.5%, not trivial but still fairly small given the surge in mortgage rates and the collapse in mortgage applications 3/ https://t.co/Ve3FrougOb — PolitiTweet.org

Paul Krugman @paulkrugman

Since the beginning of this year, we've seen soaring mortgage rates and a soaring dollar, both largely reflecting Fed tightening. Both should exert strong contractionary effects over time 2/ https://t.co/0eEewwdgTh — PolitiTweet.org

Paul Krugman @paulkrugman

How to think about the GDP advance release: it make claims that we were in a recession in the 1st half of the year look silly, but it suggests, at least to me, that there's a lot of contraction still in the pipeline 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

That would be the 1950s in which the top tax rate was 91 percent and a third of private-sector workers were union members — PolitiTweet.org

Paul Krugman @paulkrugman

RT @jasonfurman: Could call it the Inflation Increasing Act of 2023. — PolitiTweet.org

Paul Krugman @paulkrugman

I know political scientists are skeptical, but ... https://t.co/N44XpNGYgF — PolitiTweet.org

Paul Krugman @paulkrugman

Still trying to preregister on GDP release. I hadn't realized that most of the Atlanta Fed number is driven by net exports — a large positive despite strong dollar. Strange — and likely to go in reverse https://t.co/4deCH1UrjW — PolitiTweet.org

Paul Krugman @paulkrugman

Here's what it would look like if the Atlanta Fed nowcast is right: the "scissors" between hours and output would stop widening but not close much 7/ https://t.co/VmsboEZfX9 — PolitiTweet.org

Paul Krugman @paulkrugman

The correct statement is that productivity probably isn't falling rapidly, as it seemed to be in the first half of the year. 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

So actually would need faster growth than expected to make this call. Mea culpa. Rapid decline probably over, but return to normal growth not yet in sight 5/ https://t.co/h9qApeLEZw — PolitiTweet.org

Paul Krugman @paulkrugman

You're right — PolitiTweet.org

Paul Krugman @paulkrugman

RT @TheStalwart: CBDCs are a solution to a problem (The problem being technocrats at central banks wanting to get invited to panels about… — PolitiTweet.org

Paul Krugman @paulkrugman

RT @edroso: https://t.co/nnXSmuy5HZ — PolitiTweet.org

Paul Krugman @paulkrugman

Oh, forgot to mention: if real GDP grew fairly fast in 3rd quarter, as nowcasts say, it will suggest that the productivity slump was a blip, and the economy can accommodate wage growth without excessive inflation. So here too it's topsy-turvy: strength may support a pivot 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

A substantial decline in core inflation is also baked in, because market rents — reflected in shelter CPI with a long lag — are rolling over. So if this report suggests that the depressing effects of Fed hikes are still mostly ahead, good case for a pivot 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Mortgage applications are down 70%, so a large housing slump is already baked in. If it hasn't shown up yet, just wait 2/ https://t.co/ahSacM1IjT — PolitiTweet.org

Paul Krugman @paulkrugman

Want to preregister a take on tomorrow's GDP advance release: if residential investment hasn't fallen much, that's a sign that Fed policy is too tight, not too loose. Why? Because it means that large negative effects of rate hikes are still in the pipeline 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

I know it's hard to talk about this politically — people see gas prices and blame the party in charge. But they shouldn't 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

If you ask what Rs are proposing now, it's basically Trussonomics — large unfunded tax cuts sold on the completely unfounded claim that they'll boost economic growth. And they're also threatening to cause a financial crisis over the debt limit 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

R candidates constantly point to the low price of gasoline in January 2021. But that low price reflected a world economy — not just the US — still depressed by the effects of the pandemic 2/ https://t.co/BQFwH3erzV — PolitiTweet.org

Paul Krugman @paulkrugman

A crushingly obvious point that doesn't get made enough: Republicans are running on inflation, but have no plan — none at all — to bring it down 1/ https://t.co/Dhyiovlj1p — PolitiTweet.org

Paul Krugman @paulkrugman

Notes from (the) underground https://t.co/5gR5cRTh0j — PolitiTweet.org

Paul Krugman @paulkrugman

And the fall in real wages in general is all about energy and food, which don't have much to do with domestic economic policy. In short, stimulus may have been excessive, but it doesn't explain the politics 2/ — PolitiTweet.org