Paul Krugman Quotes

77 Sourced Quotes

Economics is harder than physics; luckily it is not quite as hard as sociology. Why is economics such a hard subject? Part of the answer has to do with complexity. The economy cannot be put in a box. [...] Another reason economics is hard is that the critical sociologist is right: it involves human beings, who do not behave in simple, mechanical ways.

Paul Krugman
At the time, I thought of it this way: it was as if bacteria that used to cause deadly plagues, but had long been considered conquered by modem medicine, had reemerged in a form resistant to all the standard antibiotics. Here's what I wrote in the introduction to the first edition: "So far only a limited number of people have actually fallen prey to the newly incurable strains; but even those of us who have so far been lucky would be foolish not to seek new cures, new prophylactic regimens, whatever it takes, lest we tum out to be the next victims." Well, we were foolish. And now the plague is upon us.

Paul Krugman
This article makes three points. First, it argues that concerns about competitiveness are, as an empirical matter, almost completely unfounded. Second, it tries to explain why defining the economic problem as one of international competition is nonetheless so attractive to so many people. Finally, it argues that the obsession with competitiveness is not only wrong but dangerous, skewing domestic policies and threatening the international economic system.

Paul Krugman
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.

Paul Krugman
So let's bid a not at all fond farewell to the Big Zero — the decade in which we achieved nothing and learned nothing.

Paul Krugman
In this book I try to show how models of self-organization can be applied to many economic phenomena - how the principle of "order from instability," which explains the growth of hurricanes and embryos, can also explain the formation of cities and business cycles; how the principle of "order from random growth" can explain the strangely simple rules that describe the sizes of earth quakes, meteorites, and metropolitan areas. I believe that the ideas of self-organization theory can add substantially to our understanding of the economy; whatever their ultimate usefulness, these ideas are very exciting, and playing around with them is tremendous fun.

Paul Krugman
To be a progressive, then, means being a partisan—at least for now. The only way a progressive agenda can be enacted is if Democrats have both the presidency and a large enough majority in Congress to overcome Republican opposition. And achieving that kind of political preponderance will require leadership that makes opponents of the progressive agenda pay a political price for their obstructionism—leadership that, like FDR, welcomes the hatred of the interest groups trying to prevent us from making our society better.

Paul Krugman
Isn't there something noble, even inspiring, about fighting the good fight, year after year, and gradually making things better?

Paul Krugman
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.

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

Paul Krugman
One interesting footnote: although Friedman made great strides in macroeconomics by applying the concept of individual rationality, he also knew where to stop. In the 1970s, some economists pushed Friedman's analysis of inflation even further, arguing that there is no usable trade-off between inflation and unemployment even in the short run, because people will anticipate government actions and build that anticipation, as well as past experience, into their price-setting and wage-bargaining. This doctrine, known as rational expectations, swept through much of academic economics. But Friedman never went there.

Paul Krugman
In effect, Japan in the Nineties offered a fresh opportunity to test the views of Friedman and Keynes regarding the effectiveness of monetary policy in depression conditions. And the results clearly supported Keynes's pessimism rather than Friedman's optimism.

Paul Krugman
Supply-side economics... is like one of those African viruses that, however often it may be eradicated from the settled areas, is always out there in the bush, waiting for new victims.

Paul Krugman
We're now in the seventh year of a slump brought on by Wall Street excess; the wizardly job of allocating the economy's investment resources consisted, we now know, largely of funneling money into a real estate bubble.

Paul Krugman
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.

Paul Krugman
There was a limited literature on external economies and international trade before 1978. It was never, however, very influential, because it seemed terminally messy; even the simplest models became bogged down in a taxonomy of possible outcomes. What has since become clear is that this messiness arose in large part because the modelers were asking their models to do what traditional trade models do, which is to predict a precise pattern of specialization and trade.

Paul Krugman
... and Newt [Gingrich] — 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.

Paul Krugman
That's a hard answer to accept, especially for those American policy intellectuals who recoil from the dreary task of reducing deficits and raising the national savings rate. But economics is not a dismal science because the economists like it that way; it is because in the end we must submit to the tyranny not just of the numbers, but of the logic they express.

Paul Krugman
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.

Paul Krugman
It's a great honour to be asked to give this talk, especially because I'm arguably not qualified to do so. I am, after all, not a Keynes scholar, nor any kind of serious intellectual historian. Nor have I spent most of my career doing macroeconomics. Until the late 1990s my contributions to that field were limited to international issues; although I kept up with macro research, I avoided getting into the frontline theoretical and empirical disputes.

Paul Krugman
We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead. Some people say that our economic problems are structural, with no quick cure available; but I believe that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men.

Paul Krugman
The best you can say about economic policy in this slump is that we have for the most part avoided a full repeat of the Great Depression. I say for the most part because we actually are seeing a Depression-level slump in Greece, and very bad slumps elsewhere in the European periphery. Still, the overall downturn hasn't been a full 1930s replay. But all of that, I think, can be attributed to the financial rescue of 2008-2009 and automatic stabilizers. Deliberate policy to offset the crash in private spending has been largely absent.

Paul Krugman
Many of the stories economists tell take the form of models—for whatever else they are, economic models are stories about how the world works.

Paul Krugman
Crucially, the rise of the American hard right was the rise of a coalition, an alliance between an elite seeking low taxes and deregulation and a base of voters motivated by fears of social change and, above all, by hostility toward you-know-who.

Paul Krugman
Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.

Paul Krugman
In the course of describing my formative moment in 1978, I have already implicitly given my four basic rules for research. Let me now state them explicitly, then explain. Here are the rules: 1. Listen to the Gentiles
2. Question the question
3. Dare to be silly
4. Simplify, simplify

Paul Krugman
The serious lesson of the antics in Argentina, then, is that the big issues of monetary economics—fixed vs. flexible exchange rates, whether countries should have independent currencies at all—are still wide open. It's an eternal controversy, and not even the pope can resolve it.

Paul Krugman
Why doesn't policy-relevant work seem to conflict with my "real" research? I think that it's because I have been able to approach policy issues using almost exactly the same method that I use in my more basic work.

Paul Krugman
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.

Paul Krugman
The idea that a country's economic fortunes are largely determined by its success on world markets is a hypothesis, not a necessary truth; and as a practical, empirical matter, that hypothesis is flatly wrong. That is, it is simply not the case that the world's leading nations are to any important degree in economic competition with each other, or that any of their major economic problems can be attributed to failures to compete on world markets.

Paul Krugman