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And yet, he's been right about the consequences of the financial crisis, austerity, and debt hysteria where everyone else in the punditry has been wrong. I'm so

by rquantz 13y ago

And yet, he's been right about the consequences of the financial crisis, austerity, and debt hysteria where everyone else in the punditry has been wrong. I'm sorry that he thinks Silk Road and bitcoin are stupid. I happen to agree with him, but even if I didn't, I think with his track record you ignore his analysis on macroeconomics at your peril.

pdonis 13y ago
he's been right about the consequences of the financial crisis I'm not so sure. He did predict that quantitative easing would not cause inflation; but the reason QE has not caused inflation is that banks are not making loans; they are letting $2.4 trillion of QE money sit in their accounts at the Fed instead of loaning it out. Krugman most certainly did not predict that outcome; he said QE would cause a recovery in the loan market. It hasn't. Getting one prediction right by accident because you got another prediction egregiously wrong doesn't make you a good predictor.
- rquantz 13y ago
  he said QE would cause a recovery in the loan market. Can you provide a citation for that claim? Because my recollection is that he said QE would have limited effects. I can't find much supporting this memory right now, aside from this entry about QE2[1]. He definitely supported QE, but I don't think he ever argued it would fix everything by itself. He's consistently argued that the Fed can't fix things by itself. On the other hand, here's this entry where he says that, contrary to what you suggest, the whole point of QE is to cause inflation [2]. [1] http://krugman.blogs.nytimes.com/2010/10/23/how-to-think-about-qe2-wonkish/ http://krugman.blogs.nytimes.com/2010/10/23/how-to-think-abo... [2] http://krugman.blogs.nytimes.com/2009/03/20/fiscal-aspects-of-quantitative-easing-wonkish/ http://krugman.blogs.nytimes.com/2009/03/20/fiscal-aspects-o...
  - pdonis 13y ago
    my recollection is that he said QE would have limited effects You're correct, he did say that back in 2008. See Amezarak's post in response to me upthread. he says that, contrary to what you suggest, the whole point of QE is to cause inflation I think he meant that the Fed thought it would cause inflation. But he has said a number of times that if the economy is in a "liquidity trap", printing more money will not cause inflation. (QE is one way of effectively printing more money.)
    - deleted 13y ago
      [deleted]
yummyfajitas 13y ago
On the contrary, Krugman's been quite wrong about austerity. He claimed market monetarism could not offset austerity, for example, and that 2013 would be a test of the theory: http://krugman.blogs.nytimes.com/2013/04/28/monetarism-falls-short-somewhat-wonkish/?_r=0 http://krugman.blogs.nytimes.com/2013/04/28/monetarism-falls... The results are in, Krugman was wrong. http://econlog.econlib.org/archives/2014/01/the_parrot_is_s.html http://econlog.econlib.org/archives/2014/01/the_parrot_is_s.... Actually Krugman has been getting the consequences of austerity quite wrong. For example, the sequester failed to cost 700,000 jobs: http://www.nytimes.com/2013/02/22/opinion/krugman-sequester-of-fools.html http://www.nytimes.com/2013/02/22/opinion/krugman-sequester-...

by rquantz 13y ago

pdonis 13y ago

he's been right about the consequences of the financial crisis I'm not so sure. He did predict that quantitative easing would not cause inflation; but the reason QE has not caused inflation is that banks are not making loans; they are letting $2.4 trillion of QE money sit in their accounts at the Fed instead of loaning it out. Krugman most certainly did not predict that outcome; he said QE would cause a recovery in the loan market. It hasn't. Getting one prediction right by accident because you got another prediction egregiously wrong doesn't make you a good predictor.

rquantz 13y ago
he said QE would cause a recovery in the loan market. Can you provide a citation for that claim? Because my recollection is that he said QE would have limited effects. I can't find much supporting this memory right now, aside from this entry about QE2[1]. He definitely supported QE, but I don't think he ever argued it would fix everything by itself. He's consistently argued that the Fed can't fix things by itself. On the other hand, here's this entry where he says that, contrary to what you suggest, the whole point of QE is to cause inflation [2]. [1] http://krugman.blogs.nytimes.com/2010/10/23/how-to-think-about-qe2-wonkish/ http://krugman.blogs.nytimes.com/2010/10/23/how-to-think-abo... [2] http://krugman.blogs.nytimes.com/2009/03/20/fiscal-aspects-of-quantitative-easing-wonkish/ http://krugman.blogs.nytimes.com/2009/03/20/fiscal-aspects-o...
- pdonis 13y ago
  my recollection is that he said QE would have limited effects You're correct, he did say that back in 2008. See Amezarak's post in response to me upthread. he says that, contrary to what you suggest, the whole point of QE is to cause inflation I think he meant that the Fed thought it would cause inflation. But he has said a number of times that if the economy is in a "liquidity trap", printing more money will not cause inflation. (QE is one way of effectively printing more money.)
  - deleted 13y ago
    [deleted]

yummyfajitas 13y ago

On the contrary, Krugman's been quite wrong about austerity. He claimed market monetarism could not offset austerity, for example, and that 2013 would be a test of the theory: http://krugman.blogs.nytimes.com/2013/04/28/monetarism-falls-short-somewhat-wonkish/?_r=0 http://krugman.blogs.nytimes.com/2013/04/28/monetarism-falls... The results are in, Krugman was wrong. http://econlog.econlib.org/archives/2014/01/the_parrot_is_s.html http://econlog.econlib.org/archives/2014/01/the_parrot_is_s.... Actually Krugman has been getting the consequences of austerity quite wrong. For example, the sequester failed to cost 700,000 jobs: http://www.nytimes.com/2013/02/22/opinion/krugman-sequester-of-fools.html http://www.nytimes.com/2013/02/22/opinion/krugman-sequester-...