Paul Krugman's avatar

Paul Krugman

@pkrugman.bsky.social

28259 followers 78 following 374 posts

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Finally, for those concerned inflation might get entrenched in expectations, the Atlanta Fed’s measure of business expectations is also within spitting distance of 2 percent. Hard to see anything here that justifies concerns about “sticky” inflation or a difficult “last mile” 3/

1 replies 6 reposts 51 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Underlying inflation is also low. I like the New York Fed’s measure, in large part because it’s an algorithm that doesn’t involve judgement calls and hence possible motivated reasoning. It’s within spitting distance of the 2 percent target 2/

1 replies 6 reposts 58 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

I haven’t been paying as much attention as usual to inflation indicators. But we’ve been getting a string of good news.   One source of inflation pessimism was the high ratio of job openings to unemployed workers. That issue has now gone away, with unemployment still very low 1/

8 replies 29 reposts 100 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

In other news, inflation looks beaten. The blip a few months ago looks like start-of-year price resets, and what’s left is lagged housing costs

18 replies 76 reposts 368 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

I really hated writing this www.nytimes.com/live/2024/06...

19 replies 2 reposts 31 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

I’m in Warsaw talking about the future of the European economy, so I’m late to this party. But I’ll have a blog post up soon very reluctantly making the case for Biden — the best president of my adult life — to step aside in favor of Harris.

67 replies 11 reposts 77 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Not about the debate: I write in The Guardian about the legacy of austerity www.theguardian.com/politics/ng-...

2 replies 34 reposts 100 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

What people say versus what they do, part 10,000

14 replies 28 reposts 179 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Illuminating report on the state of American workers: eig.org/american-wor...
 
My response essay here: eig.org/wp-content/u...

2 replies 8 reposts 32 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

It seems certain that Trump will try to make crime an issue in the debate, even though Biden has ended the Trump crime wave — homicides in 2024 will be far lower than 2020, and probably below 2019. But anyway, I was struck by this by Maria Bartiromo 1/

18 replies 37 reposts 195 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

As someone who walks around NYC all the time, and also tracks the crime #s, I know how ridiculous this is. But it’s not just me. Weekend foot traffic in Midtown, where Fox has its offices, is higher than prepandemic; strangely, people don’t seem too terrified to go out 2/

6 replies 23 reposts 185 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

It seems certain that Trump will try to make crime an issue in the debate, even though Biden has ended the Trump crime wave — homicides in 2024 will be far lower than 2020, and probably below 2019. But anyway, I was struck by this by Maria Bartiromo 1/

18 replies 37 reposts 195 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

I’ve been in a meeting with a number of men (and a handful of women) in suits, and while there has been intelligent discussion, my main impression is that Very Serious People are irrationally complacent about the consequences — economic and political — if Trump wins.

71 replies 226 reposts 1276 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Is there really a last mile in inflation? Using Cleveland Fed nowcasts, here’s the picture for core PCE; bear in mind that lagged shelter is still exaggerating the numbers. That bump early this year looks like an aberration.

3 replies 7 reposts 61 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Do they really expect me to swallow that tripe? When it’s trippa alla Romana at Saltimbocca in Rome, yes

13 replies 6 reposts 210 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Trump’s tariff proposal is bad, but the Republican National Committee response is really scary. www.nytimes.com/live/2024/06...

2 replies 11 reposts 64 likes

Reposted by Paul Krugman

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Extremely nerdy note: core inflation has been higher than headline. But this is NOT because volatile food and energy are driving disinflation. It’s because excluding food and energy raises the weight of shelter. Over the past year, headline ex-shelter is 2.1, core ex-shelter 1.9.

1 replies 7 reposts 91 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

I keep seeing a factoid to the effect that the euro area and the US economies were the same size in 2008, but America is now 44 percent bigger. Folks, that’s just the exchange rate. At purchasing power parity, nothing like that has happened

10 replies 191 reposts 527 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?

13 replies 64 reposts 211 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

National reporting is incomplete, but with almost half a year in for NYC, the Trump crime wave is clearly over

6 replies 68 reposts 324 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?

13 replies 64 reposts 211 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

So how is it that in the 19th century the federal government largely paid its way with tariffs? Because back then the government was much, much smaller. Believing that we can go back to those days is just ignorant 6/

3 replies 4 reposts 96 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

With an elasticity of 1, the estimate looks like this: t*14/(1+t) = 8 Work this through, and the tariff rate is 8/6 = 1.33, that is, 133 percent. With a higher elasticity, it would go higher, maybe to infinity 5/

1 replies 3 reposts 31 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

How high you have to go in the end depends on how much prices affect import demand — the elasticity. I assume an elasticity of 1, which is what you sometimes get for the medium run, although the long run is probably higher (which makes it worse) 4/

1 replies 2 reposts 28 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Tariffs would raise the cost of imports to consumers, so we'd import less, which would mean you need a higher tariff rate. But this reduces imports further, meaning a still higher tariff, and so on 3/

2 replies 6 reposts 34 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Imports are about 14 percent of US GDP. Federal income tax revenue (not including payroll taxes) is about 8 %. So you might think replacing it would require a tariff rate of 8/14 or around 57 percent. But ... 2/

1 replies 5 reposts 42 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

This was a bit cryptic, so a quick explanation 1/

5 replies 28 reposts 102 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Trump has reportedly floated the idea of replacing income taxes with tariffs. I’ll have to write this up in detail, but my first-pass estimate is that this would require an *average* tariff rate of 133 percent.

55 replies 95 reposts 533 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Remember all those 2022 predictions that getting inflation down would require years of very high unemployment? Here’s where we are now (using the Cleveland Fed nowcast for May)

20 replies 144 reposts 628 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

The possible next president, who among other things wants to strip the Federal Reserve of independence

9 replies 33 reposts 145 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

So core inflation ex shelter — which lags far behind market prices — was 0.0 mom and 1.9 yoy. Inflation has basically been defeated.

8 replies 51 reposts 174 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Only the view that people have bought into a narrative about bad things happening to somebody else (not people they know) explains all four. We can talk about where that narrative comes from, but it fits all the facts in a way alternatives don’t 3/

3 replies 16 reposts 149 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Many try to explain 1 by saying that things are really bad, eg bc of interest rates. But this doesn’t explain 2,3 or 4. Others say that people are angry about past inflation, while believing that they earned their offsetting wage increases. This could explain 2 but not 3 and 4 2/

3 replies 11 reposts 99 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Here are what I consider the key points about negative views on the economy.   1. People are down on the economy 2. They’re fairly positive about their own finances 3. They’re relatively positive about their local/state economy 4. Views on the economy are extremely partisan 1/

9 replies 34 reposts 180 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Still thinking about that survey in which 78 percent said that fast food has become an unaffordable luxury. Here are real sales at limited service restaurants: people seem to be buying an awful lot of something they can’t afford

29 replies 43 reposts 265 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

A number I’ve been watching: the NY Fed asks people whether they expect to be better or worse off a year from now. By this indicator, optimism is surging

10 replies 31 reposts 189 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

But, but, everyone says that fast food has become an unaffordable luxury

21 replies 21 reposts 159 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Ten years ago many Very Serious People said that America could never return to full employment because our workers lacked the necessary skills

17 replies 89 reposts 427 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Nobody knows what political effect The Conviction will have. But there’s one argument I’m surprised I haven’t seen. Some low-information voters surely lean toward Trump because they think of him as a winner, an image he has cultivated all this life. Doesn’t this dent that image?

37 replies 39 reposts 330 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

For he’s a jolly good felon, which nobody can deny (claiming dibs on that one)

11 replies 58 reposts 362 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

Soft evidence on inflation: the Fed’s latest Beige Book says “Prices increased at a modest pace.” In Jan. 2020 it said “Prices continued to rise at a modest pace.” Consistent with the view that the inflation bump is over.

1 replies 6 reposts 48 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

A wise older colleague once told me that I should wear my name tag at conferences. “Yes, everyone knows who you are but it’s bad manners to take it for granted”

4 replies 5 reposts 52 likes

Paul Krugman's avatar Paul Krugman @pkrugman.bsky.social
[ View ]

There has been a lot about the degradation of Google and other search engines. It’s real, and making my job difficult. I do a lot of tracking down reports that I heard about or saw in passing, and it’s getting ever harder to do that. And AI is worse than useless …

18 replies 35 reposts 286 likes