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Krugman frequently disparages the predictions of most economists... His own record isn't perfect, but pretty good. IMO, he is pretty careful about not making

by craigyk 13y ago

Krugman frequently disparages the predictions of most economists... His own record isn't perfect, but pretty good. IMO, he is pretty careful about not making too many falsifiable claims. His main point over the past couple of years has simply been that under current economic conditions money printing won't result in inflation, and that the government should have done more to address unemployment as the biggest problem of the financial crisis.

pdonis 13y ago
His main point over the past couple of years has simply been that under current economic conditions money printing won't result in inflation But the reason it hasn't is that banks are not making loans with the new money; they are letting $2.4 trillion of it sit in their accounts at the Fed. Krugman most certainly did not predict that; he said QE would help restart the loan market. So he got one prediction right only by accident, as a result of getting another prediction egregiously wrong.
- Amezarak 13y ago
  Krugman most certainly did predict that. In fact he repeats it constantly, and says that monetary policy can only be effective in the current crisis by changing expectations. Indeed, Krugman is always pointing to Japan as an example, and the same thing happened in Japan, which Krugman explained in a paper in 1998. Krugman's attitude seems to have mostly been "if we can't have fiscal policy that would actually solve the problem, then I guess we'll have to hope that QE does something but I doubt it." Krugman, 2008: http://krugman.blogs.nytimes.com/2008/09/22/the-humbling-of-the-fed-wonkish/ http://krugman.blogs.nytimes.com/2008/09/22/the-humbling-of-... 2009: http://krugman.blogs.nytimes.com/2009/12/14/followup-on-samuelson-and-monetary-policy/ http://krugman.blogs.nytimes.com/2009/12/14/followup-on-samu... 2013: http://krugman.blogs.nytimes.com/2013/08/14/hawks-doves-and-ostriches/ http://krugman.blogs.nytimes.com/2013/08/14/hawks-doves-and-... I don't know what it is about Krugman, but he seems to have his views misattributed more than any other commentator. http://krugman.blogs.nytimes.com/2014/03/19/nobody-could-have-predicted-monetary-edition/ http://krugman.blogs.nytimes.com/2014/03/19/nobody-could-hav...
  - pdonis 13y ago
    Krugman is always pointing to Japan as an example You're right; I had forgotten that he pointed out that QE didn't help Japan's loan market at all. Krugman's attitude seems to have mostly been "if we can't have fiscal policy that would actually solve the problem, then I guess we'll have to hope that QE does something but I doubt it." Yes, he often talks about "forward guidance" as his preferred method. I didn't mean to say he was in favor of QE in preference to other methods. Personally, I'm as skeptical of "forward guidance" as I am of QE, mainly because the Fed has, for quite some time now, been trying to double-promise that it won't raise interest rates for a while even if the economy starts recovering. The problem is that nobody appears to believe them.

by craigyk 13y ago

pdonis 13y ago

His main point over the past couple of years has simply been that under current economic conditions money printing won't result in inflation But the reason it hasn't is that banks are not making loans with the new money; they are letting $2.4 trillion of it sit in their accounts at the Fed. Krugman most certainly did not predict that; he said QE would help restart the loan market. So he got one prediction right only by accident, as a result of getting another prediction egregiously wrong.

Amezarak 13y ago
Krugman most certainly did predict that. In fact he repeats it constantly, and says that monetary policy can only be effective in the current crisis by changing expectations. Indeed, Krugman is always pointing to Japan as an example, and the same thing happened in Japan, which Krugman explained in a paper in 1998. Krugman's attitude seems to have mostly been "if we can't have fiscal policy that would actually solve the problem, then I guess we'll have to hope that QE does something but I doubt it." Krugman, 2008: http://krugman.blogs.nytimes.com/2008/09/22/the-humbling-of-the-fed-wonkish/ http://krugman.blogs.nytimes.com/2008/09/22/the-humbling-of-... 2009: http://krugman.blogs.nytimes.com/2009/12/14/followup-on-samuelson-and-monetary-policy/ http://krugman.blogs.nytimes.com/2009/12/14/followup-on-samu... 2013: http://krugman.blogs.nytimes.com/2013/08/14/hawks-doves-and-ostriches/ http://krugman.blogs.nytimes.com/2013/08/14/hawks-doves-and-... I don't know what it is about Krugman, but he seems to have his views misattributed more than any other commentator. http://krugman.blogs.nytimes.com/2014/03/19/nobody-could-have-predicted-monetary-edition/ http://krugman.blogs.nytimes.com/2014/03/19/nobody-could-hav...
- pdonis 13y ago
  Krugman is always pointing to Japan as an example You're right; I had forgotten that he pointed out that QE didn't help Japan's loan market at all. Krugman's attitude seems to have mostly been "if we can't have fiscal policy that would actually solve the problem, then I guess we'll have to hope that QE does something but I doubt it." Yes, he often talks about "forward guidance" as his preferred method. I didn't mean to say he was in favor of QE in preference to other methods. Personally, I'm as skeptical of "forward guidance" as I am of QE, mainly because the Fed has, for quite some time now, been trying to double-promise that it won't raise interest rates for a while even if the economy starts recovering. The problem is that nobody appears to believe them.