Paul Krugman

Paul Krugman @paulkrugman

A shared currency may make sense between economies that are each others' major trading partners and are similar enough that they won't face large "asymmetrical shocks". So, here's the destination of Brazil's exports 2/ https://t.co/KokjpqHram — PolitiTweet.org

Paul Krugman @paulkrugman

What with everything else going on, haven't commented on proposed currency union between Argentina and Brazil. But it's a nice opportunity to apply the theory of Optimum Currency Areas — which tells us that it's a terrible idea 1/ https://t.co/DTufAGaq0y — PolitiTweet.org

Paul Krugman @paulkrugman

My hope is that people who were right about inflation — and got a lot of justified credit for making that call — won't try to hold on to their glory days by denying the growing evidence that the inflation surge is behind us 10/ https://t.co/6OKonXWMIs — PolitiTweet.org

Paul Krugman @paulkrugman

We are still waiting for Godot, I mean the Employment Cost Index, which might (or might not) give some new justification for pessimism. But as Joey Politano says, the available data suggest deceleration 9/ https://t.co/D7ct9294kf — PolitiTweet.org

Paul Krugman @paulkrugman

You could argue that the textbook model is all wrong, and inflation will be sticky for other reasons. But most of the data seem to show inflation falling fast, and attempts to deny the good news are getting increasingly contorted 8/ — PolitiTweet.org

Paul Krugman @paulkrugman

Textbook macro says that inflation can become entrenched via expectations. But medium- and long-term inflation expectations never rose much, and are now back to roughly pre pandemic levels 7/ https://t.co/Qa1h9dcQEt — PolitiTweet.org

Paul Krugman @paulkrugman

Team Stagflation nonetheless argues that inflation will remain high, that bringing it down will require an extended period of high unemployment, as happened in the 1980s. And of course they could be right. But what's their theory of the case? 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

At this point the big surge in domestic spending is behind us, with nominal spending growth rapidly slowing to rates more or less consistent with target inflation 5/ https://t.co/ZjeFjjFVGy — PolitiTweet.org

Paul Krugman @paulkrugman

But now the argument is between what we might call Team Stagflation and Team Soft Landing. Many of the same players, but in many ways a role reversal in arguments 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Second, the current inflation debate is very different from the one that took place in 2021. Then, Team Transitory argued that despite large fiscal stimulus we wouldn't see a big rise in inflation; we were wrong, and have admitted that 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Headline inflation is actually being held down by some clearly one-off things, like falling gas prices, but also being exaggerated by shelter prices that reflect a rent surge that ended many months ago. Overall it's more or less a wash, and the disinflation is real 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Some notes on inflation. First, clearing up a misconception: no, measures like "supercore" that exclude food, energy, shelter and used cars aren't finding disinflation by throwing out the inflation 1/ https://t.co/Sdow3fKMmV — PolitiTweet.org

Paul Krugman @paulkrugman

RT @JosephPolitano: Incredibly ironic that while chiding Paul Krugman for overlooking data lags in housing CPI last year Larry Summers cite… — PolitiTweet.org

Paul Krugman @paulkrugman

Fwiw, PCE-based measures of core inflation ~3% over past 3 months, and part of that is shelter. So unless we get a really terrible ECI report, everything is coming up soft landing https://t.co/GEEPSy57Er — PolitiTweet.org

Paul Krugman @paulkrugman

RT @nytopinion: When it comes to economic assessment, feelings are no substitute for data. But the data isn’t perfect either, writes @PaulK… — PolitiTweet.org

Paul Krugman @paulkrugman

Thanks for suggestions. Cleared cache and it seems to be back. — PolitiTweet.org

Paul Krugman @paulkrugman

So am I the only person who has been unable to work with BLS databases for the past couple of days? When I click "Get data" it just blanks out my selection. — PolitiTweet.org

Paul Krugman @paulkrugman

We can talk about possible future recession, and about how underlying inflation may be higher than headline. But that's speculation rather than reporting, and arguable at the very least. Hard to argue against the proposition that media have missed the pretty good reality 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

So, if your picture of the economy came entirely from headlines and cable chyrons — which is probably true for many — would you know that the economy has grown 6.7 percent under Biden so far and inflation for the past 6 months was 1.9 percent? 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Notably, Republicans rate current economic conditions as worse than in June 1980, when unemployment was 7.6 percent and inflation 14 percent 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Obviously a rhetorical question. A plurality of voters believes we're in a recession; they got that notion from somewhere 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Oh my. A wonderful scholar. His classic "The dynamo and the computer," about how it takes time for businesses to learn what to do with technology, shaped decades of economic analysis — PolitiTweet.org

Paul Krugman @paulkrugman

RT @timobres: I report, with great sadness, the passing of Paul David. A fabulous scholar of economic history and the economics of technol… — PolitiTweet.org

Paul Krugman @paulkrugman

Obviously Germany can't have AFVs named Rommel or von Manstein. But in a way continuing the WW2 tradition of Panzers and Tigers is a bit like that. They could honor virtues, like the UK Challenger. Or cultural traditions. I'd be terrified to face an armored Currywurst — PolitiTweet.org

Paul Krugman @paulkrugman

Totally irrelevant question: Why are German tanks named after cats, while US tanks are named after generals? Also, given lamentable US history of naming military bases after Confederate traitors, how did we end up fighting WW2 with tanks named after William Tecumseh Sherman? — PolitiTweet.org

Paul Krugman @paulkrugman

All that said, very happy to see this kind of work being done. Traditional core inflation has performed badly lately, and we need to be exploring new approaches 9/ — PolitiTweet.org

Paul Krugman @paulkrugman

I say this even though I want to believe that inflation has rolled over. It's clearly way down, but a mechanical approach throws out data that might give reason for caution, say on wages 8/ — PolitiTweet.org

Paul Krugman @paulkrugman

E.g., a smoothing approach interprets any sustained downturn as permanent — so it ends up saying that the Great Depression was over by 1935. I actually worry Eeckhout's approach may be doing a milder version of this now, over-interpreting favorable recent inflation shocks 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

A parallel that immediately occurred to me is estimating potential GDP. It can seem appealing to use a statistical smoothing procedure like Hedrick-Prescott, which sometimes produces plausible results. But we also know that it can go badly wrong at times 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

On the other hand, the filter also throws out information. The dynamics of, say, official food and shelter price indexes are different in known ways; applying a common smoothing approach to the overall index means ignoring what we know about sectors 5/ — PolitiTweet.org