Paul Krugman Quotes

When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly. The vision that emerges as the profession rethinks its foundations may not be all that clear; it certainly won’t be neat; but we can hope that it will have the virtue of being at least partly right.

Here, then, is a revised version of Marshall's rules: (1) Figure out what you think about an issue, working back and forth among verbal intuition, evidence, and as much math as you need. (2) Stay with it till you are done. (3) Publish the intuition, the math, and the evidence - all three - in an economics journal. (4) But also try to find a way of expressing the idea without the formal apparatus. (5) If you can, publish that where it can do the world some good.

If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God.

Consider John Kenneth Galbraith or Lester Thurow, both leading economists in the view of the general public, both with all the formal qualifications, both totally ignored by the academic mainstream. Or consider Robert Mundell, who is still revered for his contributions to international monetary theory, yet whose later incarnation as the father of supply-side economics has similarly been ignored.

...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.

Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem.

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.

It is a bit funny, but also quite sad: Those who preach the doctrine of global glut are tilting at windmills, when there are some real monsters out there that need slaying.

I do not think this is a permanent condition. The craziness comes more from cultural ethnic issues than anything else, because you have a… A lot of the real craziness come from, if you like, from rural who feel that they’re losing their country, they’re losing ownership of the country. And they are right—we are becoming more diverse, more multicultural. And in the end... they are not the future. In the end, the power they still have will go away. But it’s a very difficult time until then. So the future is Mayor Deblasio of New York, but Ted Cruz is still out there with the ability to do a lot of damage.

First, most of the speculation about the superiority of the communist system - including the popular view that Western economies could painlessly accelerate their own growth by borrowing some aspects of that system - was off base. Rapid growth was based entirely on one attribute: the willingness to save, to sacrifice current consumption for the sake of future production. The communist example offered no hint of a free lunch.
Second, the economic analysis of communist countries' growth implied some future limits to their industrial expansion - in other words, implied that a naive projection of their past growth rates into the future was likely to greatly overstate their real prospects. Economic growth that is based on expansion of inputs, rather than on growth in output per unit of input, is inevitably subject to diminishing returns. It was simply not possible for the Soviet economies to sustain the rates of growth of labor force participation, average education levels, and above all the physical capital stock that had prevailed in previous years. Communist growth would predictably slow down, perhaps drastically.

Things could have been even worse. This week, we managed to avoid driving off a cliff. But we’re still on the road to nowhere.

Republicans Add Insult to Illness

As the example of Ronald Reagan shows, real political success comes not simply from appealing to the interests that people currently perceive but from finding ways to redefine their perceived interests, to harness their discontent in favor of changes that you can lead.

The idea of comparative advantage—with its implication that trade between two nations normally raises the real incomes of both—is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed.

If economists ruled the world, there would be no need for a World Trade Organization. The economist's case for free trade is essentially a unilateral case—that is, it says that a country serves its own interests by pursuing free trade regardless of what other countries may do.