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Paul Krugman

@paulkrugman

11 Apr

So, will this be Inflation Freakout Week? Maybe, or maybe it will wait a month or two. But soon we'll be seeing some big headline price rises — and it will be important to put them in context. Even if you're worried about a long hot Summers of overheating, this won't be it 1/

Where we are now is that what looks like rapid economic recovery will run into bottlenecks that cause some prices to rise quickly — and temporarily. That is, it won't represent a rise in underlying inflation, it will just be a blip 2/

A fairly recent historical precedent: early 2008, when rising global demand hit bottlenecks in commodity production. Commodity prices really surged 3/

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Paul Krugman

@paulkrugman

7 Apr

https://twitter.com/Birdyword/status/1379713107392536576

That's a pet peeve of mine. Everyone knows that the $'s reserve status changes everything — everyone except people who've actually looked into the issue carefully 1/

https://twitter.com/Birdyword/status/1379713107392536576

I still see constant assertions that the US has a unique ability to run persistent trade deficits bc of $'s role. Except many other countries do the same 2/

Here are current account balances as % of GDP for US, UK, Australia 3/

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Paul Krugman

@paulkrugman

5 Apr

I've been a bit surprised to see some Republicans opposing Biden's plans by claiming that the Trump tax cut for corporations was a big success. I thought they'd gone into hiding given its dismal failure 1/

I mean, we were promised a huge surge in business investment; here's what actually happened 2/

But silly me. The players involved here have a long history of denying plain facts that conflict with their agenda. Remember how Rs responded to the surge in Obamacare enrollments? 3/ newrepublic.com/article/117205…

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Paul Krugman

@paulkrugman

2 Apr

Morning in America! 1/ nyti.ms/31GfoI5

Still a long way to go, but full employment by early next year — and maybe some temporary overheating — now looking very plausible. Why so different from the sluggish recovery after 2008? 2/

I and others were predicting a V-shaped recovery this time because the pandemic shock, unlike the deleveraging shock of 2008, didn't leave a large overhang of impediments to recovery 3/ bcf.princeton.edu/events/paul-kr…

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Paul Krugman

@paulkrugman

1 Apr

Having a bit of fun delving into the history of infrastructure spending. Q: how big a deal was the Erie Canal? It cost $7 million, which sounds trivial. 1/

But the US economy was vastly smaller then than it is now, and prices were much lower. This may have been almost 1% of a year's GDP, the equivalent of ~$200 billion today 2/ measuringworth.com/datasets/usgdp…

And this was a state, not a national project. As a share of New York's GDP, it was probably the equivalent of a national project > $1 trillion today 3/

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Paul Krugman

@paulkrugman

1 Apr

This attack might have a smidgen of credibility if the Trump tax cut had actually caused corporations to bring money back to America and invest more 1/ msn.com/en-gb/news/wor…

But it didn't. 2/ cfr.org/blog/trump-tax…

As a result, Trump's tax cut was basically a giveaway to stockholders — and foreigners own 40 percent of US equities 3/ taxpolicycenter.org/taxvox/who-own…

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