Paul Krugman

Paul Krugman @paulkrugman

Nerdy economist reaction to events in Ukraine: They're a military version of Dornbusch's Law in action. That law says that the inevitable crisis takes longer to come than you can imagine, but when it does come it happens faster than you can imagine 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

The economics commentariat obsesses endlessly about the Fed, and it's true that the dollar is special. But it looks to me as if the really agonizing choices and uncertainty are in Europe 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

Is this just extrapolating from current energy prices? Does it matter that the survey is of Germans, who learn in school about 1923 but not the Bruening deflation? Or is Europe really getting unanchored in a way America isn't? 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

It turns out that the Bundesbank has a survey that looks similar in design to NY Fed. And it looks much grimmer! 4/ https://t.co/wBgsjOD7RA https://t.co/FMRUDLN5bK — PolitiTweet.org

Paul Krugman @paulkrugman

The conventional wisdom has been that Europe is fundamentally in better shape — not overheated, so it was just transitory energy prices. But of course the energy price shock is now off the charts. And should we worry about expectations? 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

My relatively benign view on the US is informed a lot by surveys, like the NY Fed survey; anxiously awaiting Monday release, but last release showed inflation expectations falling — down to 2.3% for 5 years 2/ https://t.co/GQTuqwsG7G — PolitiTweet.org

Paul Krugman @paulkrugman

Next week I'll be participating in a discussion of inflation policy in the US and Europe. Have a fairly clear picture for the US, I think: economy overheated, but inflation expectations anchored, so we need some cooling but not a Volcker-style era of pain. What about Europe? 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @arindube: I don't find analyses that take measured vacancies to unemployment rate to suggest over-heating in the labor market to be con… — PolitiTweet.org

Paul Krugman @paulkrugman

11 days ago — PolitiTweet.org

Paul Krugman @paulkrugman

Our currency is becoming the world's problem — again https://t.co/TiuGZq5Bft — PolitiTweet.org

Paul Krugman @paulkrugman

Dragons and elves — I can take them or leave them. A dramatization of a really good William Gibson novel? By the people behind Westworld? Hell yes. https://t.co/0bv9iZMNvO — PolitiTweet.org

Paul Krugman @paulkrugman

There's a way to escape that fate: cultivate a reputation as a hopelessly incompetent administrator. Easier to achieve if it's true. — PolitiTweet.org

Paul Krugman @paulkrugman

Europe isn't exactly at war, but it's following wartime-type economic policies https://t.co/7HAddKMkrq — PolitiTweet.org

Paul Krugman @paulkrugman

RT @IAPonomarenko: Balakliya has been liberated https://t.co/I5A4ExOA9Z — PolitiTweet.org

Paul Krugman @paulkrugman

Some perspective. Elizabeth was crowned 60 years after the 2nd inauguration of Grover Cleveland, and 68 years before the inauguration of Joe Biden. — PolitiTweet.org

Paul Krugman @paulkrugman

Anyway, most of the outlook depends on how overheated we think labor markets really are; it's all about which Beveridge you choose to drink. And I honestly don't know what I believe 8/ — PolitiTweet.org

Paul Krugman @paulkrugman

But right now we're in a period of *low* headline inflation, with falling commodity prices, easing supply chains, etc. Market-based expectations have been falling, not rising. 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

One interesting point in their paper is that they give only a small role to rising inflation expectations. This is very different from the 70s. They suggest that expectations may yet become unanchored in the face of high actual inflation, which is certainly a worry 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

Or are we in part looking at a one-time adjustment to changes in work-life patterns? I suspect there's some of that. Obviously you don't want to throw out all the positive numbers. But wages, for example, suggest lower underlying inflation than their measure 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

Another issue is the measure of core inflation. They prefer median inflation, which I too was fond of for a while. But at this point, as I understand it, median inflation is basically housing. So is housing a good measure of underlying inflation? 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Reasonable people on all sides here, and I don't feel that I understand post-Covid labor markets well enough to make a judgment. Put it this way: if we've had enough structural change to massively shift the B curve, we've also had enough to screw up standard measures. So, ??? 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

A lot of discussion out there about their use of vacancies to unemployment as a measure of labor market tightness. Indeed, the apparent outward shift in the Beveridge curve is the main driver of their pessimism. What do I think about that? No strong views 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

So, I'm reading the Ball/Leigh/Mishra paper Jason Furman calls "the scariest economics paper of 2022." It definitely paints an ugly picture. And these are serious guys, not at all permahawks. Their grimness might well be right. But I have questions 1/ https://t.co/ZCDekMAIq9 — PolitiTweet.org

Paul Krugman @paulkrugman

Agreed — PolitiTweet.org

Paul Krugman @paulkrugman

If you're following the news from the Kharkiv front you know what he's talking about — PolitiTweet.org

Paul Krugman @paulkrugman

Deglobalization — happening? https://t.co/mtlQ1IsaiX — PolitiTweet.org

Paul Krugman @paulkrugman

On Labor Day weekend, life is hard https://t.co/jGpJaZy9NT — PolitiTweet.org

Paul Krugman @paulkrugman

Commodity prices falling worldwide — but until the other day European natural gas was the big exception thanks to Putin's embargo. Any idea what's going on here? https://t.co/Vc9OZILPfp — PolitiTweet.org

Paul Krugman @paulkrugman

So we watch and wait. 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

If it works, it will look for a long time as if nothing much is happening — a settlement here, a settlement there. Then maybe — maybe! — a sudden Russian collapse. The point is that it will be hard for outsiders to know whether we're looking at stalemate or impending triumph 6/ — PolitiTweet.org