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Paul Krugman

@paulkrugman

Jun 13

https://twitter.com/paulkrugman/status/1801296665451593868

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

https://twitter.com/paulkrugman/status/1801296665451593868

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/

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/

Read 6 tweets

Paul Krugman

@paulkrugman

May 21

The Fed survey of economic well-being is out; some changes at the margin, but the basic story remains that Americans say they're doing mostly OK, their local economy isn't too bad, but the national economy is terrible 1/

Consistent with polling. Here's Quinnipiac on Wisconsin voters 2/

And here's WSJ on swing states 3/

Read 4 tweets

Paul Krugman

@paulkrugman

Feb 17

With the recent rise in consumer sentiment, time to revisit this excellent Briefing Book paper. On reflection, I'd do it a bit differently; same basic conclusion, but I think partisan asymmetry explains even more of the remaining low numbers 1/ briefingbook.info/p/asymmetric-a…

The Michigan sentiment index has two components: current conditions and expectations. It's kind of legitimate to have partisan diffs on expectations, if you think your party has better policies. It's the gap on current conditions that's startling 2/

Michigan doesn't provide partisan breakdowns every month until 2017 (hence the limited range of that chart). A quick and dirty approach is to use annual averages, with whatever months they do provide for each year, which lets us push back to 2006 3/

Read 7 tweets

Paul Krugman

@paulkrugman

Feb 10

Recent economic news has been extremely good. But there's a strange meme among some D consultants that Biden shouldn't boast about it, because it seems out of touch — that people aren't feeling the good economy. But they are! 1/

The venerable Michigan survey has rocketed up lately 2/

It's true that consumer sentiment is still weaker than you might expect given the economic numbers. But that's largely partisanship. Using Civiqs numbers, Democrats have more or less fully accepted the good news 3/

Read 7 tweets

Paul Krugman

@paulkrugman

Feb 2

Immigration is looming larger in the campaign, partly because it's becoming harder for Republicans to run against Biden on the economy. But there's a strong case that immigration has been a key part of Biden's economic success 1/

Inflation has come down so easily in part because of strong labor force growth. How much of that growth can be attributed to foreign-born workers? All of it 2/

Some people might look at that and say that foreigners have stolen 3 million jobs from Americans. But we have full employment, indeed a very tight labor market. Look at what the Conference Board survey says 3/

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Paul Krugman

@paulkrugman

Jan 26

A tale of two inflation measures. Some analysts are still citing the blue line, when they should be citing the red line. This is professional malpractice 1/

Using annual core CPI puts you way behind the curve, for 2 reasons. First, annual: even core CPI was 4.6 in the first half of 2023, 3.2 in the second half. Second, known lags in official shelter prices lagging far behind market rents 2/

So annual CPI creates a spurious impression of stubborn inflation, with a difficult last mile to cover. PCE puts a lower weight on shelter, and on a shorter-term basis tells us that we've already traveled that last mile 3/

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