Dear liberal overlords

Meta-listen to this guy:

Liberals pundits should listen to Krugman’s economic analysis of monetary policy, and ignore his pessimistic political views on its feasibility.

when you listen to that guy. And consider the fact that that guy didn’t win the Noble prize in political punditry.


7 thoughts on “Dear liberal overlords”

  1. What I really don’t get about Krugman is that he believes that the US is in a liquidity trap AND that the Fed can commit to higher inflation. But if there’s a liquidity trap, then how does the Fed commit to higher inflation? If the Fed’s monetary policy is currently impotent, then how can it credibly commit to affect the price level? When you’re stuck, you’re stuck. I’ve never seen him explain that.

    At least Sumner doesn’t believe in liquidity traps, so he’s internally consistent.

  2. (1) Are they still paying interest on reserves?

    (2) The zero bound is a problem for a particular instrument, so, yeah, do the obvious and use other instruments.

    (3) Hello, Mr. Treasury, here’s a blank check, go crazy.

    (4) For economists, making inflation is either (i) far too easy, or (ii) impossible, depending on the state of the world, this holds for the same economist.

    (5) Monetary is probably one of the weakest of the fields mostly because it’s, by far, one of the most “reduced form” fields. For example, Calvo + Taylor rule captures a whole bunch of 0% of recent events.

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