Paul Krugman, Nobel Prize winner, argues that “inflation is bad” because it “sounds good to the Fed, it looks good to you, it sounds good to Wall Street.”
Krugman was responding to comments by Fed Chair Janet Yellen and Chairman Ben Bernanke, who said the Fed should not keep rates high “until inflation is falling, but in the meantime it should hold the line.”
Krugman, who won a Nobel Prize for his book “Nixon’s Last Stand,” said he disagrees with Bernanke and Yellen.
“It’s a bit of an odd view.
When you hear Bernanke say that, it’s an odd thing to say,” Krugman said in a video posted on Twitter.
“But it is true.
And if you are a Fed governor, then that’s what you should be saying.”
In an interview with Bloomberg Television, Bernanke defended the Fed’s policy.
“Inflation was a factor in the crash of 2008, and the Fed is committed to supporting that.
But it was not a key driver of the financial crisis,” Bernanke said.
“If we had the same interest rate policy, we’d still be in the midst of a global financial crisis.”
Krugman said Bernanke’s position “sends a bad signal” to investors.
“He says inflation is bad because it sounds nice to the politicians and to Wall St., but it’s bad because that makes us look bad.
That makes it harder for us to do our jobs and for markets to function,” Krugman added.
In a column published Thursday, Bloomberg Businessweek said Krugman’s comments on inflation were a “big problem” for the Fed.
“The Fed’s current inflation outlook, which is pretty good, is not likely to be enough to prevent the Great Recession from ending,” Siegel added. “
This column will make it much harder for him to convince investors to buy bonds at a premium, which he has done before,” he added.
“The Fed’s current inflation outlook, which is pretty good, is not likely to be enough to prevent the Great Recession from ending,” Siegel added.
Paul Krugman responds to Janet Yellin and Ben Bernacke’s comments about the Fed rate hike: Paul Krugman on Janet Yellein and Bernanke: “We shouldn’t keep rates as high as they are” Paul Krugman responded to comments from Fed Chair Yellen during a Wall Street Journal interview on Thursday.
“I think there is a case for continuing to have inflation as low as it is,” Krugman, a Nobel laureate who won two Nobel Prizes, said.
“[But] I think that there is no good reason to keep rates above zero.
That’s not a good thing for markets and people.”
Krugman’s interview with the Journal came after Yellen said the U.S. central bank has been doing “well” with inflation in recent years and is “on the right path.”
In a statement, Yellen acknowledged “the pain of the Great Depression,” but said the central bank is “focusing on the long-term health of the economy and the health of our economy.”
“The Federal Reserve continues to take a measured approach to the rate of inflation and the level of unemployment,” she said.
Paul Ryan and Donald Trump discuss ‘too much debt’ and deficit spending: The Wall Street Times, March 20, 2021 Paul Ryan, a House Republican who chairs the Budget Committee, and Donald T. Trump, a presumptive GOP presidential candidate, have discussed “too much deficit spending,” which the two Republican presidential candidates have called “dangerous” and “disastrous.”
In their interview with The Wall St. Journal, the two men were asked by editorial page editor Dan Diamond to share their thoughts on the current federal budget situation and how much deficit they think the U