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17 Sep, 4 tweets, 2 min read
Really surprised to see Greg Mankiw raising the specter of European economies depressed by excessively large welfare states. Even more surprised to see him citing as his main source a 2003(!) paper by Ed Prescott 1/ nytimes.com/2021/09/15/opi…
The image of Europe staggering under the disincentive effects of taxes and social benefits is way out of date. These days prime-age adults are *more* likely to be employed in Europe than in the US 2/
GDP per capita is lower, but mainly because Europeans take much more vacation time than Americans do — and not because of high taxes. Alesina et al debunked that claim (and Prescott) long ago 3/ nber.org/system/files/c…
If you want to oppose Biden's plans, fine. But don't base your case on what you think you've heard about the problems Europe had in the 1990s. 4/

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More from @paulkrugman

Paul Krugman Profile picture
10 Sep
Biden's vaccine mandate is terrific public policy; it is, more or less literally, what the doctor ordered. Is it good politics? We don't know. But one thing worth noting is the contrast with Obama 1/
It's now clear that Republicans effectively sabotaged Obama's economy, slowing the recovery, by imposing fiscal austerity (using completely false claims that they were worried about debt.) And Obama was basically passive, even accepting their premises 2/
Rs are now sabotaging Biden by undermining the fight against Covid; how self-conscious they are about this is something we can argue, but that's how it's working out. And having blocked basic public health measures, they're all set to blame Biden for Covid's persistence 3/
Read 5 tweets
Paul Krugman Profile picture
9 Sep
Ricardo Reis is asking the right question: the current rate of inflation, or even the rate over the next year plus, matters less than whether pricing behavior starts to build in expectations of future inflation 1/ brookings.edu/bpea-articles/…
Historically, we've had episodes of high inflation that didn't get built in, and faded quickly; the 70s was exceptional 2/
But how can we tell? Not sure that surveys are the best or at least only approach. Suggestion: look at price- and wage-setting behavior 3/
Read 8 tweets
Paul Krugman Profile picture
4 Sep
Responses to this confirm something I've observed before: nothing gets people angrier than monetary theory. Say that Trump is a traitor and they yawn; say that fiat money works and they scream incoherently 1/ nytimes.com/2021/09/03/opi…
Two points I'd like to clarify. As some point out, Hayek eventually endorsed monetary stimulus in a depression. But he was very much a liquidationist in the 1930s, which is when it mattered 2/
Second, some object to my grouping Hayek with Schumpeter, because they had different stories about overinvestment: Schumpeter emphasized innovation, Hayek loose money. But that misses the point 3/
Read 5 tweets
Paul Krugman Profile picture
28 Aug
Mississippi has passed a grim milestone: Its total Covid deaths per capita exceed the toll in New York, which mostly happened early in the pandemic when we didn't know much about the disease — and didn't have vaccines 1/
One observation: early on people thought the pandemic was a problem for densely populated urban areas. But MS is very rural 2/
In fact, at this point there's a negative correlation between density and Covid death rates (7-day average) 3/
Read 4 tweets
Paul Krugman Profile picture
27 Aug
Negative responses to today's column tend to focus on lot on CA's homeless problem, which I acknowledge. But I find myself thinking about our tendency to give too much weight to the misery we see, versus that we don't 1/ nytimes.com/2021/08/26/opi…
The homeless in CA are around 0.4% of the population 2/ endhomelessness.org/homelessness-i…
Texas, with cheap housing, has many fewer homeless. But almost a quarter of nonelderly lack health insurance, compared with 11% in CA 3/ kff.org/other/state-in…
Read 7 tweets
Paul Krugman Profile picture
25 Aug
A crazy process and lack of attention could give California a Trumpist governor. Watching the horror show, I started looking at how CA has fared since 2010, when progressives took power. Did you know that its economy grew as fast as Texas'? 1/ Image
CA also matched TX employment growth 2/ Image
Where CA did badly — and it did very, very badly — was housing, where the NIMBYs prevented remotely adequate construction 3/ Image
Read 4 tweets

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