Paul Krugman Quotes

We’re living in a Dark Age of macroeconomics. Remember, what defined the Dark Ages wasn’t the fact that they were primitive — the Bronze Age was primitive, too. What made the Dark Ages dark was the fact that so much knowledge had been lost, that so much known to the Greeks and Romans had been forgotten by the barbarian kingdoms that followed.

In the last few years it has become apparent that during the 1940s and 1950s, a core of ideas emerged regarding external economies, strategic complementarity, and that remains intellectually valid and may continue to have practical applications. This set of ideas which I will refer to as "high " — anticipated in a number of ways the cutting edge of modern trade and growth theory. But these ideas have had to be rediscovered. Between 1960 and 1980 high development theory was virtually buried, essentially because the founders of development economics failed to make their points with sufficient analytical clarity to communicate their essence to other economists, and perhaps even to each other. Only recently have changes in economics made it possible to reconsider what the development theorists said, and to regain the valuable ideas that have been lost.

...Exxon Mobil is a worse environmental villain than other big oil companies...Exxon, headed by Mr. Raymond, chose a different course of action: it decided to fight the science....And that's just what Exxon Mobil has done: lavish grants have supported a sort of alternative intellectual universe of global warming skeptics....the fact is that whatever small chance there was of action to limit global warming became even smaller because ExxonMobil chose to protect its profits by trashing good science.

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging.

If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'

The whole subject of the liquidity trap has a sort of Alice-through-the-looking glass quality. Virtues like , or a known to be strongly committed to , become vices; to get out of the trap a country must loosen its belt, persuade its citizens to forget about the future, and convince the that the government and central bank aren’t as serious and austere as they seem.

Sometimes economists in official positions give bad advice; sometimes they give very, very bad advice; and sometimes they work at the OECD.

It has been obvious for quite a while that Sanders — not just his supporters, not even just his surrogates, but the candidate himself — has a problem both in facing reality and in admitting mistakes.

...and Newt <nowiki>[Gingrich]</nowiki> — although somebody said "he’s a stupid man’s idea of what a smart person sounds like," but he is more plausible than the other guys that they’ve been pushing up.

The fact is that Democrats have already been pursuing policies that are much better for the white working class than anything the other party has to offer. Yet this has brought no political reward.

If the question is when markets will recover, a first-pass answer is never.

Like any major intellectual contribution, Keynes's ideas were bitterly criticized. To many people it seems obvious that massive economic slumps must have deep roots. To them, Keynes's argument that they are essentially no more than a problem of mixed signals, which can be cured by printing a bit more money, seems unbelievable.

From the point of view of a modern economist, the most striking feature of the works of high is their adherence to a discursive, nonmathematical style. Economics has, of course, become vastly more mathematical over time. Nonetheless, development economics was archaic in style even for its own time. Of the four most famous high development works, Rosenstein-Rodan's was approximately contemporary with Samuelson's formulation of the Heckscher–Ohlin model, while Lewis, Myrdal, and Hirschman were all roughly contemporary with Solow's initial statement of growth theory.
This lack of formality was not because development economists were peculiarly mathematically incapable. Hirschman made a significant contribution to the formal theory of in the 1940s, while Fleming helped create the still influential of s. Moreover, the development field itself was at the same time generating mathematical planning models—first Harrod–Domar type growth models, then linear programming approaches that were actually quite technically advanced for their time.
So why didn't high development theory get expressed in formal models? Almost certainly for one basic reason: the difficulty of reconciling economies of scale with a competitive market structure.

The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone—horrors!—printing money) can ever be a good idea. Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms—especially when it gives them a chance to lecture others on their failings.

In the court of conventional wisdom, Ronald Reagan stands accused of inflicting a huge burden of debt upon his country. He cut taxes on the rich, increased military spending, and failed to cut enough spending elsewhere to pay for his largesse. The result was a string of unprecedented peacetime deficits, and a debt that will be a drag on the national for decades to come.
Reagan is guilty as charged. The supply-side apologists' claim that some extraordinary economic success vindicates in spite of the deficits just doesn't hold up in the face of the evidence. The question, however, is whether the crime was a felony or a misdemeanor.
The answer proposed here will not satisfy those with a taste for drama. Reagan created a deficit, and it hurt American economic growth. But even if the effects of the visible deficit are supplemented with appeals to several alleged hidden deficits of the 1980s, the cost was not catastrophic. The deficit is not nearly the monster some people imagine.