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Sep 17 • 4 tweets • 1 min read
Yep. The Great Resignation appears to have been temporary. 1/
I mean, does this look as if prime age adults have exited the work force en masse? 2/
Labor force participation down for >55 — but this is largely aging within this group. Being 69, or even 63, is different from being 56! 3/ bloomberg.com/opinion/articl…
You know what really has led to a smaller labor force than we expected at this point? Reduced immigration 4/

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More from @paulkrugman

Paul Krugman Profile picture
Sep 16
As they say in the Patrick O'Brian novels, I give you joy of your victory! A few FRED-based thoughts on one of Brad's big insights: that the world didn't really break out of the Malthusian trap until 1870 1/
As it happens, my friend FRED includes the Bank of England dataset with estimates of some UK variables going back to the Middle Ages. And it allows me to make a few pictures of real wages versus population 2/
Up through 1600 the world was Malthusian pure and simple. Real wage in 2015 pounds versus population (inverted): just sliding up and down the curve with the rise and fall of plagues 3/
Read 11 tweets
Paul Krugman Profile picture
Sep 13
Well, I was getting ready to write about why we shouldn't make too much of the monthly CPI decline. Now need to write about not making too much of the monthly rise 1/
The core inflation number is the one that has people worried. But as I've been saying, that's basically shelter. And these days it's a really problematic indicator of what's happening to underlying inflation. 2/
CPI shelter prices are set to rise for quite a while simply because they reflect trends in newly rented housing with a lag. That's not a critique; there are reasons for doing it the way BLS does. But private indicators suggest that the rent surge is leveling off 3/
Read 4 tweets
Paul Krugman Profile picture
Sep 10
Next week I'll be participating in a discussion of inflation policy in the US and Europe. Have a fairly clear picture for the US, I think: economy overheated, but inflation expectations anchored, so we need some cooling but not a Volcker-style era of pain. What about Europe? 1/
My relatively benign view on the US is informed a lot by surveys, like the NY Fed survey; anxiously awaiting Monday release, but last release showed inflation expectations falling — down to 2.3% for 5 years 2/ newyorkfed.org/microeconomics…
The conventional wisdom has been that Europe is fundamentally in better shape — not overheated, so it was just transitory energy prices. But of course the energy price shock is now off the charts. And should we worry about expectations? 3/
Read 6 tweets
Paul Krugman Profile picture
Sep 8
So, I'm reading the Ball/Leigh/Mishra paper Jason Furman calls "the scariest economics paper of 2022." It definitely paints an ugly picture. And these are serious guys, not at all permahawks. Their grimness might well be right. But I have questions 1/ brookings.edu/wp-content/upl…
A lot of discussion out there about their use of vacancies to unemployment as a measure of labor market tightness. Indeed, the apparent outward shift in the Beveridge curve is the main driver of their pessimism. What do I think about that? No strong views 2/
Reasonable people on all sides here, and I don't feel that I understand post-Covid labor markets well enough to make a judgment. Put it this way: if we've had enough structural change to massively shift the B curve, we've also had enough to screw up standard measures. So, ??? 3/
Read 8 tweets
Paul Krugman Profile picture
Sep 4
I'm part of the watching world. Zero expertise, although I've read a fair bit of military history. But for fellow watchers, maybe a hint about historical analogies 1/
Many people still seem to expect WW2-style battles: breakthroughs, deep penetrations and sweeping envelopments. But current weapons technology seems to favor the defense, and in many ways this war looks more like WW1 (plus HIMARS, a whole other story) 2/
What I'm reading about Kherson seems a bit reminiscent of the Hundred Days' Offensive in 1918. Instead of prolonged mass attacks that tried to break the German lines, the Allies launched a series of short sharp jabs, seeking surprise and probing for weak points 3/
Read 7 tweets
Paul Krugman Profile picture
Sep 4
So some people don't seem to realize that this was a *dovish* thread. I was pushing back against assertions, most prominently by Larry Summers, that we need an extended slump to control inflation 1/
My argument was that even if we use the standard framework, current data suggest the need to cool off the labor market, not to put it through a Volcker-style wringer 2/
That standard framework didn't come out of thin air. Data from the big rise and fall of inflation in the 70s and 80s sort of seemed to support it 3/
Read 7 tweets

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