9 ms·
https://twitter.com/paulkrugman/status/1573649995290628096 https://twitter.com/paulkrugman/status/1573649995290628096 The iron law of Krugman strikes again. I
by darawk 4y ago
https://twitter.com/paulkrugman/status/1573649995290628096 https://twitter.com/paulkrugman/status/1573649995290628096
The iron law of Krugman strikes again. I really need to start trading on this.
- warinukraine 4y agoThanks for the link, it was really interesting. But what is the iron law exactly?
- cavisne 4y agothe perception/meme that krugman is always wrong as exactly the wrong time (a similar meme exists for Cramer).
- djbusby 4y agoIt's Jim Cramer from CNBC (USA media) for those out of the loop.
- nairboon 4y agoYes, sell whatever Cramer tells you to buy, to make bank.
- warinukraine 4y agoGot it. But he is wrong? No one expects an economic argument to call the exact bottom to the date. If the sterling keeps weakening for two weeks more, I'll call him wrong. The other things he said, about the foreign debts and the likelihood of not paying, seem obviously correct to me.
- jeffbee 4y agoThat's hilarious, but is it a currency crisis or is it just trading down a bit?
- refurb 4y agoI feel that's a fairer reading of what he's saying. But you can just feel his ego through his tweets "I'm supposed to know something about currency crises — I did invent the academic field!"
- warinukraine 4y ago> I did invent the academic field!" It doesn't follow that he can make money trading it.
- darawk 4y agoThere's no real formal definition of crisis, but being fair to him it's not yet a crisis. It is however a sharp devaluation, and appears to be the opposite of what he was predicting.
- onlyrealcuzzo 4y agoI don't know how you got that. He's saying that a devaluation won't kill the country because the debt is denominated in Pounds. That seems like a strange clarification. If he's predicting the Pound wouldn't decline - he'd say that. Not say that if it does decline, it won't be a problem... That implies it's a possibility. It just won't cause a crisis if it happens.
- darawk 4y agoHe says it most clearly right here: https://twitter.com/paulkrugman/status/1573656086716071937 https://twitter.com/paulkrugman/status/1573656086716071937 "The moron risk premium has now been priced in". That is, he believes the currency depreciation is substantially over. He is also saying the thing you're reading him as saying too though.
- candybar 4y agoGBP/USD hasn't moved substantially in either direction since Krugman's tweets.
- throw123123123 4y agoI have a lot to say about Krugman, specially when he talks about Argentina, but he is not wrong here. It's not a crisis to have a devaluation.
- darawk 4y agoIt's not not a crisis either, though. Crisis doesn't really have a formal definition, it's just an extreme devaluation. I agree that what's happened so far is not quite yet a "crisis", but it certainly seems like Krugman was attempting to predict that not-this would happen.
- colinmhayes 4y agoThat tweet was 2 days ago and the pound has barely moved against the dollar since then. It lost a few cents, but that's hardly a crisis.
- zarzavat 4y agoIt is a crisis when you already have an inflation crisis. People already can’t afford to keep warm this winter. Therefore, the government is capping energy bills, if there is a currency devaluation the government has to borrow more to maintain the cap...
- spaceman_2020 4y agoPaul Krugman is probably the most consistently wrong popular economist I can think of.
- currenciessfe 4y agoThey are all wrong. You just never heard of them. Taleb loves making fun of economists. One of his jokes: Trader comes to manager and told him he lost 10 mil because he bought treasuries since the bank economist said they would go up. Manager fires him. Trader asks why, is he required to always win? Manager says no, I didn't fire you because you lost money, I fired you because you listened to the bank economist.
- imtringued 4y agoNeoclassical economics can't be correct, the obvious problem is the lack of liquidity costs/taxes as a way to balance out liquidity benefits. The system breaks down if you do the right thing, so you must do the wrong thing all the time.
- notacoward 4y agoTaleb is in a poor position to be making fun of others' predictions.
- fulafel 4y agoDo you mean as a columnist/tweeter or in his work as a profesisonal economist in academia, textbooks etc? Judged by peers he's still quite valued eg by this ranking: https://ideas.repec.org/top/top.person.all.html https://ideas.repec.org/top/top.person.all.html (rank 36/3255) - but of course in academic research you don't necessarily aim to be right as often as possible, it's a search and exploration of ideas and testing what works.
- candybar 4y agoYou're being far too charitable here - the idea that Krugman has a history of being wrong has nothing to do with anyone trying to evaluate his track record in an objective manner, but everything to do with those who disagree with his political viewpoints trying to take him down a notch, especially to counter his stellar academic career. This is of course silly - Krugman is obviously highly knowledgeable about economics and his understanding of and ability to explain sophisticated economic phenomena are rivaled by few, but the nature of economy is such that anyone that makes lots of predictions publicly is going to have a long track record of being wrong.
- hristov 4y agoThe iron law of hristov strikes again. It merely says that twitter is a terrible platform to publish anything that isn't short and idiotic.