Paul Krugman: WWS 594, Economics of the Welfare State: Trying to Help Workers

WWS 594, Economics of the Welfare State: Trying to Help Workers

Slides here (pdf).

Paul Krugman: ECO 348, The Great Recession: The Stimulus

ECO 348, The Great Recession: The Stimulus

Slides here (pdf).

2013 in review

The WordPress.com stats helper monkeys prepared a 2013 annual report for this blog.

Here’s an excerpt:

A New York City subway train holds 1,200 people. This blog was viewed about 3,700 times in 2013. If it were a NYC subway train, it would take about 3 trips to carry that many people.

Click here to see the complete report.

Week 33, 2013, further reading

How Isabel dos Santos took the short route to become Africa’s richest woman – Forbes

The Centre Cannot Hold? – Mainly Macro

Synthesis Lost – Paul Krugman

The Pigou Effect (Double-super-special-wonkish) – Paul Krugman

Globalization and Keynesianism – Paul Krugman

Expectations driven liquidity traps – Mainly Macro

Bringing economics back into fiscal policymaking – Mainly Macro

Week 32, 2013, further reading

Worker wages: Wendy’s vs. Wal-Mart vs. Costco – CNNMoney

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PolitiFact and the Shape of the Planet, Deficit Edition
by Paul Krugman, NYT
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What Killed Theory? (Wonkish)
by Paul Krugman, NYT
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Week 31, 2013, further reading

Structural Humbug
by Paul Krugman, NYT
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Models and Mechanisms (Wonkish)
by Paul Krugman, NYT
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ZLB Models? – Mainly Macro
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Sex, Money and Gravitas
by Paul Krugman, NYT
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Chaos Looms
by Paul Krugman, NYT
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Week 30, 2013, further reading

Fox News Host Attacks Muslim Scholar Who Wrote About Jesus

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When is the time for austerity?
by Alan Taylor, Vox
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Gimme That Old-Time Macroeconomics
by Paul Krugman, NYT
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Euro Crisis is Just Beginning, Global Collapse is Coming

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Are we prepared for the next financial crisis?

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The growing economic and ideological breach between Northern and Southern EU countries is pushing Europe towards a perfect storm.
by Sonia Alonso
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This Time Was Predictable
by Paul Krugman, NYT
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Week 29, 2013, further reading

Health Insurance and Labor Supply
by John H. Cochrane, The Grumpy Economist
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China getting close to hit the Great Wall
by Antonio Fatas and Ilian Mihov
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The Unredeemable Opaqueness of the Hard-Money Men
by Paul Krugman, NYT
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Creating the best workplace on Earth
by Rob Goffee and Gareth Jones, HBR
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Japan’s stagnation: demand-side or supply-side? – Noahpinion

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Wage-Price Flexibility in a Liquidity Trap, Again Again Again
by Paul Krugman, NYT
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Vinho Verde: Portuguese for ‘Cheap and Cheerful’ – NYT

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Fiscal Multipliers in a small euro área economy:
how big can they get in crisis times?

by Gabriela Castro, Ricardo M. Felix, Paulo Julio, Jose R. Maria – BdP
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Paul Krugman: Potential Mistakes (Wonkish)

 

Update: I should have mentioned that the CBO doesn’t use the filtering method in its estimates for the US; as best I understand it, it uses a production function approach that is much less likely to interpret a prolonged slump as a decline in potential output. And that’s a very good thing.

I missed this, from a couple of days ago: the European Commission has, rather belatedly, woken up to the likelihood that it is understating potential output in debtor countries, overstating their “natural” rate of unemployment, and therefore underestimating the degree of fiscal austerity being imposed. There is, it turns out, an Output Gap Working Group considering these questions, and I’m glad to hear it.

For I’ve been warning about this issue for a long time — not just in the current slump, but 15 years ago, in the context of Japan (pdf).

Some notes on the issue after the jump.

Read more…

Economics and Politics by Paul Krugman – The Conscience of a Liberal – NYTimes.com

Paul Krugman: Rationality and the Euro

 

Simon Wren-Lewis, for once, has a happy story to tell. He looks back at Britain’s fateful decision, ten years ago, not to join the euro, and argues that the decision was made on the basis of — gasp! — actual analysis. Gordon Brown (who deserves a much better rap than he gets) brought in real economic experts, who used a real economic framework — optimum currency area theory — and concluded that the case for euro membership was not good.

And boy, was that a good call; despite the best efforts of Osborne and Co. to mess it up, there’s no comparison between British woes and those of other European nations that had large capital inflows and housing booms. Partly this is because of the De Grauwe point, which was imperfectly grasped in 2003 — the crucial importance of having your own central bank as lender of last resort for sovereign borrowing. But it’s also largely because of a point that was perfectly well understood in 2003 and has been confirmed by experience: “internal devaluation”, reducing relative prices with a fixed exchange rate, is really hard compared with just devaluing your currency. Here are BIS estimates of the Spanish and UK real exchange rates, 1999-01 = 100:

Notice how Britain effortlessly achieved a real depreciation that, if it’s possible at all, will take years and years of mass unemployment in Spain.

Unfortunately, Wren-Lewis’s description of an actual rational decision process is all too rare — perhaps especially when it comes to the euro. Talk to euro advocates and they cannot entertain, even as a hypothetical proposition, the notion that the single currency was a bad idea; I came away from one talk with the clear message that the euro cannot fail, it can only be failed, that any problems simply show that countries and leaders lack sufficient nobility of purpose.

And despite the overwhelming evidence that the euro was an even worse idea than it appeared 10 years ago, countries — notably Poland — are still considering joining. I understand that leaving the euro is a very difficult thing to contemplate; but getting in now, when you had the great good luck to avoid this mess? Awesome.

Economics and Politics by Paul Krugman – The Conscience of a Liberal – NYTimes.com