May 27, 2014

Krugman backpedals on his love for Piketty

Rarely has someone praised a book as much as Krugman did of Piketty's book on rising inequality. If you ever need to write a reference or review and need some superlatives quotes, his review is a great place to get ideas! Some nuggets from Krugman's review include: "magnificent", "sweeping meditation on inequality", "revolution in our understanding of long-term trends in inequality", "revelation", "This is a book that will change both the way we think about society and the way we do economics.", "the Piketty revolution", "an awesome work", "rigor of his capital analysis", "sheer, exhilarating intellectual elegance", "masterly diagnosis", "extremely important book on all fronts", and  "transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to."

Wow. Of course, Krugman's positive review isn't a surprise since Krugman has been talking inequality for decades. Now's he's got a big, thick tome from Piketty to back up his thesis.

But hold on -- seems there might be some funny business going on with Piketty's data. The Financial Times uncovered some issues that is making waves. Krugman in a remarkable post acknowledges this and says that Piketty will need to address this and that "we’ll see how well he does it." Quite a change from last month when Krugman said that anyone who sees problems with Piketty's data probably is wrong since Picketty's "done his homework!"  What makes this especially interesting is that Krugman led the charge during last year's economic data brouhaha when two economists were found to have made Excel errors in a well-known paper that claimed high debt levels led to lower growth.

May 21, 2014

Krugman advocates sustained population growth -- sort of...

Krugman says that you need a growing population to have a growing economy. With less population, while that is better for the environment, also leads to less wealth. There is a way to have a richer society with less population (and its environmental benefits) but this would involve certain economic tools that are not political feasible (such has allowing higher inflation).

May 15, 2014

Krugman admits he his wrong!

Krugman poo-poos the sense that Europe is back on track. He says while no disaster has happened still the very slow growth is a terrible thing. The back story is that he has been advocating for less austerity for many years but still Europe did not have looser monetary policy. The promise from those in power in Europe is that growth would come from higher confidence in the economy since they kept inflation down but Krugman's point is that growth did not result.

In this same post Krugman also admits that he was WRONG that the euro zone would split up. Back in 2012 he said it would happen in a matter of months.