Paul Krugman

Paul Krugman @paulkrugman

What somewhat surprises and disappoints me in the discussion of shelter inflation is that so few commentators seem to understand why we have a concept of core inflation — what it's for. 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @TheStalwart: Getting pre-emptively angry at people who would opt for a totally unnecessary debt default, because avoiding it with the p… — PolitiTweet.org

Paul Krugman @paulkrugman

Greet them the way Rudi Dornbusch used to: "And stable prices to you, sir" — PolitiTweet.org

Paul Krugman @paulkrugman

We're still running well above the Fed's 2 percent target, but nearly as much as standard measures say. And if, as many believe, there's still a lot of disinflation in the pipeline ... 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Conventional core, excluding food and energy, rose at a 6% rate over the past 3 months, driven by shelter at 8%. But if shelter, which is 40% of core, is "really" 3%, that means true core is ~4% 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

If "true" shelter inflation — as a measure of overheating, not cost of living — is only 3%, that matters a lot. Median inflation tends to be very close to shelter inflation, so that measure is also now ~3% 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

A quick update on shelter and inflation: Goldman Sachs has a new research note on new rental rates, as opposed to the BLS rent measure, which is dominated by leases signed some time ago. They say that new rentals now rising ~3% annual: 1/ https://t.co/bCKGJ8kNop — PolitiTweet.org

Paul Krugman @paulkrugman

RT @nytopinion: If Republicans take control of Congress, @paulkrugman writes, “the Biden administration should be prepared to turn to legal… — PolitiTweet.org

Paul Krugman @paulkrugman

RT @Noahpinion: This is a great thread by Krugman on why models matter in economics, and why Bernanke and Diamond-Dybvig made important, no… — PolitiTweet.org

Paul Krugman @paulkrugman

RT @ModeledBehavior: I don't think quiet quitting is real or affecting productivity growth. I think more likely it is actual quitting, and… — PolitiTweet.org

Paul Krugman @paulkrugman

The Fed did need to tighten. And maybe we are replaying 1980. But I still don't understand that logic. Oh, and I doubt that any observer of real estate believes that rents are still rising at a 6 percent rate 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Sorry, that was meant to be the criticism leveled at me and others. I really wasn't paying enough attention to such matters last year. But the question is, don't many indicators suggest that underlying inflation is better than the standard numbers say? 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Seriously, not trying to be tendentious. I've been clear about getting it wrong last year. But we need more than gotchas — you didn't talk about rent lags then, but you're talking about them now 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Which was then followed by a generation-long productivity boom. We don't know that the recent slump is, um, transitory, but way too soon to call it a trend 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

The closest parallel would be the conversion to a peacetime economy after WW2 — which was marked by a huge productivity decline 2/ https://t.co/qezuDU140W — PolitiTweet.org

Paul Krugman @paulkrugman

One question is, but what if productivity keeps declining? But way too soon to take the declines of first half of 2022 as a trend. After all, we've experienced huge disruptions as workers were laid off then hired again in the pandemic 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @stone_lis: This Wed, 10/19, 6:30 pm est -- @paulkrugman leads a panel with @GagnonMacro, @Claudia_Sahm & @karlbykarlsmith. Register for… — PolitiTweet.org

Paul Krugman @paulkrugman

What this means, I think, is that a lot of recent measured inflation is a lagged reflection of the pandemic shift in housing demand. Responding to this with draconian monetary policy creates huge risks — PolitiTweet.org

Paul Krugman @paulkrugman

We probably still have some economic overheating, but high core inflation is mostly reflecting big rent increases that are already behind us. If you think we're headed for a severe slump, you're saying that the Fed has already done too much 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

A quick note: Anyone who is both predicting a nasty recession *and* calling for big rate hikes isn't making sense. We don't need a major recession to end a wage-price spiral, because we don't have one 1/ https://t.co/ms1KVXW2Il — PolitiTweet.org

Paul Krugman @paulkrugman

For what it's worth, the recent rise was mainly due to some refinery issues. It's ludicrous and terrifying to think that these could determine the fate of U.S. democracy — PolitiTweet.org

Paul Krugman @paulkrugman

For reference: America is a low-tax country https://t.co/ubnKsBuXOI — PolitiTweet.org

Paul Krugman @paulkrugman

Actually the nyc subway is amazing. I think the only city with local and express trains, making travel very fast. I’ll be taking it to the GC for our event — PolitiTweet.org

Paul Krugman @paulkrugman

And while I can't prove it, I'd argue that the clarity created by models helped prevent financial meltdowns in both 2008 and 2020 fin/ — PolitiTweet.org

Paul Krugman @paulkrugman

There's a large literature on currency crises, theoretical and empirical, with much of that literature emphasizing how crises can blow out of seemingly nowhere and prove self-fulfilling. In 2008 intl macro people were surprised by the particulars, but not by the possibility 14/ — PolitiTweet.org

Paul Krugman @paulkrugman

One final point: Tooze says that economists failed to appreciate the role of financial instability. I guess that depends on which economists we're talking about. International macro, one of my two home fields, has been acutely aware of instability from the get-go 13/ — PolitiTweet.org

Paul Krugman @paulkrugman

Diamond-Dybvig-Bernanke, with minimalist models of how bank runs could happen and matter, again cut through the fog. After DDB economists could read Bagehot very differently and more productively than before 12/ — PolitiTweet.org

Paul Krugman @paulkrugman

On bank runs: of course everyone knew that they happened and did harm. But there was a lot of confusion — people thinking that runs necessarily reflected mob psychology, that they mattered only because they reduced the money supply, etc. 11/ — PolitiTweet.org

Paul Krugman @paulkrugman

It took clever little models of trade with increasing returns and imperfect competition to cut through the fog, to understand key points like the nature of the home market effect, why similar countries trade so much, the role of accident in shaping trade patterns, and more 10/ — PolitiTweet.org

Paul Krugman @paulkrugman

In fact, even orthodox trade people often cited Burenstam Linder's "Essay on Trade and Transformation", out of a sense that there was something there — but it was hard to say what 9/ https://t.co/55SFExK9Or — PolitiTweet.org