Paul Krugman

Paul Krugman @paulkrugman

If you do the arithmetic, this says that the bond market is expecting only about 2.3% inflation after this year. Why does this matter? Not because the bond market is necessarily right, but because the big concern right now is that inflation will get embedded via expectations 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

If we look at expected 5-year inflation, it's a lot lower — about 2.8% 3/ https://t.co/YzgVNlVhng — PolitiTweet.org

Paul Krugman @paulkrugman

The one-year rate on ordinary Treasuries is 0.48%. So implied expected inflation for the next year is about 3.7% (which may be a bit low, but the accuracy isn't my current point) 2/ https://t.co/xXrXQXjxQV — PolitiTweet.org

Paul Krugman @paulkrugman

One use of Twitter: to post background information that I may use in columns and newsletters. So, a bit about market expectations of inflation. Right now, the yield on one-year inflation-protected Treasuries is -3.2% 1/ https://t.co/fl2zU5H36X — PolitiTweet.org

Paul Krugman @paulkrugman

The desperation of Fox News is an indication that the economy is doing pretty well. — PolitiTweet.org

Paul Krugman @paulkrugman

Beyond that, not gonna try reading the cpi entrails. Much more curious about next employment cost index/2 — PolitiTweet.org

Paul Krugman @paulkrugman

Still the story, and the best reason to hope we can have a soft landing once Covid lets up. /1 — PolitiTweet.org

Paul Krugman @paulkrugman

RT @adam_tooze: Serious inflation hawks will focus on the rent element of CPI. It may continue strong growth in upcoming release. But it is… — PolitiTweet.org

Paul Krugman @paulkrugman

https://t.co/bt5NCtlQQz — PolitiTweet.org

Paul Krugman @paulkrugman

Another Kindleberger quote about the balance of payments (from memory): "People always want a number, but you can't just give a number, you have to tell a story." 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

Obviously if even the three-month inflation rate is still running hot, which might happen, this won't be an issue. But the point is that the data will need a lot of interpreting (and there will be endless arguments about the interpretation) 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

In that case you could have headlines shrieking "eek! inflation" while the right read should be that the Fed has successfully engineered a soft landing. 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Suppose, for example, that core inflation Dec/Dec is 4+% while 4thQ average is 2.5% — which could happen simply because cost of shelter, which is 1/3 of the CPI and is more or less the average rent actually paid, spends most of the year catching up to new-residence rents 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

One thing I should have made clearer in the last newsletter is that there's a large chance that annual and, say, quarterly inflation will be telling very different stories by late this year 1/ https://t.co/j2U9FQ3eyS — PolitiTweet.org

Paul Krugman @paulkrugman

RT @ElieNYC: Gorsuch: "the flu kills hundreds of thousands of people every year" NO IT DOES NOT. STOP GETTING YOUR MEDICAL STATS FROM FOX… — PolitiTweet.org

Paul Krugman @paulkrugman

RT @nytopinion: Keeping track of the economy is hard when we’re running on Covid time, writes @PaulKrugman. https://t.co/0cFScNsxRh — PolitiTweet.org

Paul Krugman @paulkrugman

Aha. Forgot to flack my own column. The point is that it actually made sense to accept a temporary inflation surge, as long as we can get it down https://t.co/vwqnnieJdb — PolitiTweet.org

Paul Krugman @paulkrugman

And yes, I read the recent Voxeu piece 5/ https://t.co/Bs60rxL5iX — PolitiTweet.org

Paul Krugman @paulkrugman

And the point is that when this bias is temporarily increased by a skew away from the normal pattern of demand, it makes sense to accommodate this skew with a temporary rise in inflation 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

The thought process that led me to this column began with my recalling James Tobin's underappreciated 1972 analysis of the role of nonlinearity in producing inflationary bias 3/ https://t.co/Autloqc13f — PolitiTweet.org

Paul Krugman @paulkrugman

But I didn't miss this point — it was actually the main motivator for the analysis, just too hard to lay out explicitly in a general-public column 2/ https://t.co/PeBqcQLbr7 — PolitiTweet.org

Paul Krugman @paulkrugman

Gagnon gets what I'm trying to say 1/ https://t.co/B6osbm8WdM — PolitiTweet.org

Paul Krugman @paulkrugman

RT @GagnonMacro: @paulkrugman's column today is close to what I've been saying over the past year. Of course he says it better. I saw the d… — PolitiTweet.org

Paul Krugman @paulkrugman

Yep, that was the number I was looking at. 3-month wage increase running at ~6 percent, which makes it hard to argue against Fed liftoff. I'm not a permadove. — PolitiTweet.org

Paul Krugman @paulkrugman

"Crept"? Looks like a sprint to me — PolitiTweet.org

Paul Krugman @paulkrugman

RT @charles_gaba: This column was particularly awkward for me because at the time I thought of Silver as a personal hero. https://t.co/BMef… — PolitiTweet.org

Paul Krugman @paulkrugman

So why the reversal? Supply chain issues, of course; the deviation from long-run trend gives a measure of how serious those have been 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

The long-run trend reflected differential technological progress: a modern toaster has more computing power than was available to the Apollo astronauts, while barber shops still look pretty much the same as they did in the 1960s 2/ https://t.co/rWqDJxWJau — PolitiTweet.org

Paul Krugman @paulkrugman

For reference: one important feature of recent inflation is that prices of durable goods have risen relative to services, which is very much a reversal of the historical trend 1/ https://t.co/UAjcRUQ6Y3 — PolitiTweet.org

Paul Krugman @paulkrugman

I learned this from climate change: it’s not happening/it’s happening but not man made/it’s man made but impossible to stop: you think they’d have to choose but they always infiltrate back and reoccupy the old positions — PolitiTweet.org