Paul Krugman

Paul Krugman @paulkrugman

Yes. So far we've traded better growth for higher inflation — a good bargain unless inflation gets entrenched in expectations 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Meanwhile, reason to hope that NYC will have a pretty good spring 3/ https://t.co/QABOj5jxvI — PolitiTweet.org

Paul Krugman @paulkrugman

And, of course, accusations that anyone comparing death rates since the vaccines — which are correlated with Trump vote, bc vaccination is so partisan — is being a dishonest political shill 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

I think Charles may be being too subtle here. Also, not just one critic. I'm getting a lot of "You say vaccines save lives, but lots of people died in highly vaccinated New York back in early 2020 (before vaccines were available)" 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Suggests that prices may eventually fall in smaller/less zoned cities, once houses can be built in large numbers 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

And that in turn points to our old friend disrupted supply chains, which have made construction very expensive 5/ https://t.co/v93OvL4mVi — PolitiTweet.org

Paul Krugman @paulkrugman

What's going on? The answer surely involves weak supply response 4/ https://t.co/pOeCZkz8rV — PolitiTweet.org

Paul Krugman @paulkrugman

Eg Atlanta v Boston, on a log scale so you can see proportional differences: Boston >> Atlanta last time, if anything Atlanta > Boston now 3/ https://t.co/AbsuLsbbcY — PolitiTweet.org

Paul Krugman @paulkrugman

But the 2000s bubble was geographically very uneven: prices surged in cities with strict zoning, but not in places where developers were free to sprawl => elastic housing supply. This time the price rise is across the board, in fact in some cases higher in sprawl areas 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Aha. An economic mystery solved, I think (with a suggestion from Charlie Steindel). I've been noting that we're currently seeing a surge in real house prices up to 2000s-bubble levels 1/ https://t.co/ukUAXznGpk — PolitiTweet.org

Paul Krugman @paulkrugman

Especially clear for "food away from home", which is sort of like the Big Mac index https://t.co/fR5swReuzI — PolitiTweet.org

Paul Krugman @paulkrugman

If you're going to argue that Biden's troubles are all about falling real wages, you should explain why Rs successfully ran *on the economy* despite falling real wages in 1984 and 1988 https://t.co/73hFem4bRJ — PolitiTweet.org

Paul Krugman @paulkrugman

But wage growth > ~1 percent, versus CPI > ~5 percent 3/ https://t.co/jkE5qYJC1Q — PolitiTweet.org

Paul Krugman @paulkrugman

Wage growth has accelerated, although you have to be wary of compositional effects, which means using Atlanta wage tracker or ECI 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Yep. Rising wages may tell us something about labor supply, but aren't a major source of current inflation 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

They promised us a monetary revolution, but all we got was funny-shaped profile photos — PolitiTweet.org

Paul Krugman @paulkrugman

Why does this matter? Not because consumers have any special insight or a good track record, but because we want to know if expectations of persistent inflation are getting entrenched. The answer so far is a clear no 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

Calculated as 0.2*(first year) + 0.8*(next four) = 5 year. I know that's not exactly right bc of compounding, but close enough 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

This actually implies that consumers expect inflation to be, um, transitory. Backing out the implied inflation rate after the first year 4/ https://t.co/8IWBZtRylF — PolitiTweet.org

Paul Krugman @paulkrugman

And a significant but much smaller rise in 5-year expectations 3/ https://t.co/johCPy2Te0 — PolitiTweet.org

Paul Krugman @paulkrugman

I want to enlarge on one point I made, about inflation expectations. The Michigan Survey shows a sharp rise in median expectations over the next year 2/ https://t.co/iIGjNVXNll — PolitiTweet.org

Paul Krugman @paulkrugman

Oops, we did it again 1/https://t.co/3LEyqoPOjl — PolitiTweet.org

Paul Krugman @paulkrugman

RT @nytopinion: “We can’t assess where we are simply by comparing our situation with the prepandemic trend,” @paulkrugman writes. “That tre… — PolitiTweet.org

Paul Krugman @paulkrugman

No agenda here. I'm just curious about why this time is so different 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Now even sprawling metros and smaller cities are seeing huge price runups 3/ https://t.co/ecFVAW2r4D — PolitiTweet.org

Paul Krugman @paulkrugman

In the Naughties, prices soared in places like SF and LA with constrained housing supply, but not in sprawling metros where building more homes was relatively easy 2/ https://t.co/lgRjHUXnj2 — PolitiTweet.org

Paul Krugman @paulkrugman

And now for something completely different. What the heck is going on with housing? Not just that prices are soaring, but they're soaring everywhere. Very unlike the 2000s bubble 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

And what bad things do you think might happen from talking about competition? Will Biden act irresponsibly because he blames monopolies for everything? Will he lean on the Fed to print too much money? Clearly not. So why not use inflation concerns for a good cause? 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

True, few economists believe that monopoly power has been a big cause of recent inflation. But promoting competition is a good thing in itself, and might have some impact in reducing inflation 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Which gets at the point I've been making: Why on earth are progressive pundits attacking Biden for making competition an issue? 1/ — PolitiTweet.org