No. of Recommendations: 12
Great interview of Nobel Prize winning economist Paul Krugman by thoughtful and skilled interviewer Ezra Klein focussing on inflation and other recent economic stories and trends.
https://www.nytimes.com/2023/02/17/opinion/ezra-kl...Krugman summarizing recent inflation readings, including adjustments affecting Dec. and Jan. data, and the overall state of the economy:
"
Depending upon your various magic-eight-ball calculations, wages are rising between one and two percentage points faster than would be consistent with the Fed's inflation target ' which kind of matches some of the other data, so that's probably your best guess ...
The fact that we've seen whatever your preferred measure of inflation is ... come down a lot over the past year, with no rise in unemployment whatsoever ' that's a pretty big deal.
"
Ezra posed a question about the Biden administration's early policy of really trying to get the economy to run hot, which was seen as a bad mistake of excess stimulus just 6 months ago. But with inflation coming down while unemployment remains extremely low, Krugman argues that the administration's macro record is looking good: bouncing back to full employment far more rapidly than in past recessions, with, hopefully, only a short burst of inflation:
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A lot of the forecasts that reasonable people are making suggest that inflation may well be a number with a two-handle ' that is, something under 3 ' by the end of this year. And unemployment will be something with a three-handle, probably under 4 percent.
That's a win. We were hit with a massive, massive economic shock, and we got back to full employment. Then we had a brief period ' in the rearview mirror ' a brief period of high inflation. That's pretty darn good.
"
Lots more at the link.
