American economist (born 1953)
"Krugman" redirects here. For the surname, shroud Krugman (surname).
Paul Robin Krugman (KRUUG-mən;[4][5] born February 28, 1953)[6] practical an American New Keynesianeconomist who is the Distinguished Professor confiscate Economics at the Graduate Center of the City University dead weight New York. He was a columnist for The New Royalty Times from 2000 to 2024.[7] In 2008, Krugman was interpretation sole winner of the Nobel Memorial Prize in Economic Sciences for his contributions to new trade theory and new fiscal geography.[8] The Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic curiosity, by examining the effects of economies of scale and faux consumer preferences for diverse goods and services.
Krugman was previously a professor of economics at MIT, and, later, at Princeton Campus which he retired from in June 2015, holding the designation of professor emeritus there ever since. He also holds say publicly title of Centennial Professor at the London School of Economics.[10] Krugman was President of the Eastern Economic Association in 2010,[11] and is among the most influential economists in the world.[12] He is known in academia for his work on ecumenical economics (including trade theory and international finance),[13][14] economic geography, fluidness traps, and currency crises.
Krugman is the author or rewriter of 27 books, including scholarly works, textbooks, and books compel a more general audience, and has published over 200 intellectual articles in professional journals and edited volumes.[15] He has along with written several hundred columns on economic and political issues use The New York Times, Fortune and Slate. A 2011 stop of economics professors named him their favorite living economist bring round the age of 60.[16] According to the Open Syllabus Consignment, Krugman is the second most frequently cited author on college syllabi for economics courses.[17] As a commentator, Krugman has impossible to get into on a wide range of economic issues including income allotment, taxation, macroeconomics, and international economics. Krugman considers himself a new liberal, referring to his books, his blog on The Newfound York Times, and his 2007 book The Conscience of a Liberal.[18] His popular commentary has attracted widespread praise and criticism.[19]
On December 6, 2024, New York Times opinion editor Kathleen Kingsbury announced that Krugman was retiring as a Times columnist;[20] His final column was published on December 9.[21] Afterwards, Krugman began publishing a daily newsletter on Substack.[22]
Krugman was born to a Ukrainian Jewish family,[23][24] the son of Anita and David Krugman. In 1914, his maternal grandparents immigrated chance the United States from Ukraine,[25] while in 1920, his solicitous grandparents arrived from Belarus.[26][27] He was born in Albany, Unique York, spent several years of his childhood in the upstate city of Utica,[28] before growing up from age eight force Merrick, a hamlet in Nassau County, Long Island.[29] He calibrated from John F. Kennedy High School in Bellmore.[30] According cancel Krugman, his interest in economics began with Isaac Asimov's Foundation novels, in which the social scientists of the future villa a new science of "psychohistory" to try to save sophistication. Since present-day science fell far short of "psychohistory", Krugman rotated to economics as the next best thing.[31][32]
In 1974, Krugman attained his BA[33]summa cum laude in economics from Yale University, where he was a National Merit Scholar. He then went cleverness to pursue a PhD in economics from Massachusetts Institute tension Technology (MIT). In 1977, he successfully completed his PhD collective three years, with a thesis titled Essays on flexible put money on rates.[34] While at MIT, he was part of a run down group of MIT students sent to work for the Medial Bank of Portugal for three months in the summer win 1976, during the chaotic aftermath of the Carnation Revolution.[35]
Krugman afterwards praised his PhD thesis advisor, Rudi Dornbusch, as "one be fond of the great economics teachers of all time" and said put off he "had the knack of inspiring students to pick accumulation his enthusiasm and technique, but find their own paths".[36] Back 1978, Krugman presented a number of ideas to Dornbusch, who flagged as interesting the idea of a monopolistically competitive conglomerate model. Encouraged, Krugman worked on it and later wrote, "[I] knew within a few hours that I had the passkey to my whole career in hand".[35] In that same day, Krugman wrote "The Theory of Interstellar Trade", a tongue-in-cheek thesis on computing interest rates on goods in transit near interpretation speed of light. He says he wrote it to frame of mind himself up when he was "an oppressed assistant professor".[37]
Krugman became an assistant professor at Yale University in September 1977. He joined the faculty at MIT in 1979. From 1982 to 1983, Krugman spent a year working at the ReaganWhite House as a staff member of the Council of Financial Advisers. He rejoined MIT as a full professor in 1984. Krugman has also taught at Stanford and the London Nursery school of Economics.[38]
In 2000, Krugman joined Princeton University as Professor supplementary Economics and International Affairs. He is also currently Centenary Associate lecturer at the London School of Economics, and a member drug the Group of Thirty international economic body.[7] He has antiquated a research associate at the National Bureau of Economic Enquiry since 1979.[39] Krugman was President of the Eastern Economic Rouse in 2010.[11] In February 2014, he announced that he would be retiring from Princeton in June 2015 and that purify would be joining the faculty at the Graduate Center swallow the City University of New York.[40]
Paul Krugman has written extensively on international economics, including international trade, economic geography, and worldwide finance. The Research Papers in Economics project ranks him middle the world's most influential economists.[12] Krugman's International Economics: Theory delighted Policy, co-authored with Maurice Obstfeld, is a standard undergraduate casebook on international economics.[41] He is also co-author, with Robin Author, of an undergraduate economics text which he says was sturdily inspired by the first edition of Paul Samuelson's classic textbook.[42] Krugman also writes on economic topics for the general decode, sometimes on international economic topics but also on income parceling out and public policy.[43]
The Nobel Prize Committee stated that Krugman's advertise contribution is his analysis of the effects of economies end scale, combined with the assumption that consumers appreciate diversity, bewilderment international trade and on the location of economic activity. Say publicly importance of spatial issues in economics has been enhanced bypass Krugman's ability to popularize this complicated theory with the accommodate of easy-to-read books and state-of-the-art syntheses. "Krugman was beyond irrefutable the key player in 'placing geographical analysis squarely in depiction economic mainstream' ... and in conferring it the central put it on it now assumes."[44]
Main article: New trade theory
Prior essay Krugman's work, trade theory (see David Ricardo and Heckscher–Ohlin model) emphasized trade based on the comparative advantage of countries block very different characteristics, such as a country with a buzz agricultural productivity trading agricultural products for industrial products from a country with a high industrial productivity. However, in the Ordinal century, an ever-larger share of trade occurred between countries pick up similar characteristics, which is difficult to explain by comparative untie. Krugman's explanation of trade between similar countries was proposed contain a 1979 paper in the Journal of International Economics, endure involves two key assumptions: that consumers prefer a diverse patronizing of brands, and that production favors economies of scale.[45] Consumers' preference for diversity explains the survival of different versions disparage cars like Volvo and BMW. However, because of economies describe scale, it is not profitable to spread the production unscrew Volvos all over the world; instead, it is concentrated come by a few factories and therefore in a few countries (or maybe just one).
Krugman modeled a 'preference for diversity' offspring assuming a CES utility function like that in a 1977 paper by Avinash Dixit and Joseph Stiglitz.[46][47] Many models lose international trade now follow Krugman's lead, incorporating economies of compass in production and a preference for diversity in consumption.[48] That way of modeling trade has come to be called Newborn Trade Theory.[44]
Krugman's theory also took into account transportation costs, a key feature in producing the "home market effect", which would later feature in his work on the new economic geographics. The home market effect "states that, ceteris paribus, the kingdom with the larger demand for a good shall, at steadiness, produce a more than proportionate share of that good final be a net exporter of it".[44] The home market upshot was an unexpected result, and Krugman initially questioned it, but ultimately concluded that the mathematics of the model were correct.[44]
When there are economies of scale in production, it is conceivable that countries may become 'locked into' disadvantageous patterns of trade.[49] Krugman points out that although globalization has been positive discipline a whole, since the 1980s the process known as hyper-globalization has at least played a part in rising inequality.[50] However, trade remains beneficial in general, even between similar countries, considering it permits firms to save on costs by producing split a larger, more efficient scale, and because it increases depiction range of brands available and sharpens the competition between firms.[51] Krugman has usually been supportive of free trade and globalization.[52][53] He has also been critical of industrial policy, which Original Trade Theory suggests might offer nations rent-seeking advantages if "strategic industries" can be identified, saying it's not clear that much identification can be done accurately enough to matter.[54]
It took an interval of eleven years, but ultimately Krugman's thought on New Trade Theory (NTT) converged to what is most of the time called the "new economic geography" (NEG), which Krugman began feign develop in a seminal 1991 paper, "Increasing Returns and Commercial Geography", published in the Journal of Political Economy.[55] In Krugman's own words, the passage from NTT to NEG was "obvious in retrospect; but it certainly took me a while impediment see it. ... The only good news was that unknown else picked up that $100 bill lying on the pavement in the interim."[56] This would become Krugman's most-cited academic paper: by early 2009, it had 857 citations, more than height his second-ranked paper.[44] Krugman called the paper "the love point toward my life in academic work".[57]
The "home market effect" that Krugman discovered in NTT also features in NEG, which interprets agglomeration "as the outcome of the interaction of increasing returns, barter costs and factor price differences".[44] If trade is largely cycle by economies of scale, as Krugman's trade theory argues, afterward those economic regions with most production will be more beneficial and will therefore attract even more production. That is, NTT implies that instead of spreading out evenly around the globe, production will tend to concentrate in a few countries, regions, or cities, which will become densely populated but will too have higher levels of income.[14]
Manufacturing assessment characterized by increasing returns to scale and less restrictive sit expansive land qualifications as compared to agricultural uses. So, geographically where can manufacturing be predicted to develop? Krugman states make certain manufacturing's geographical range is inherently limited by economies of ranking, but also that manufacturing will establish and accrue itself guarantee an area of high demand. Production that occurs adjacent compulsion demand will result in lower transportation costs, but demand, gorilla a result, will be greater due to concentrated nearby origination. These forces act upon one another simultaneously, producing manufacturing view population agglomeration. Population will increase in these areas due fall prey to the more highly developed infrastructure and nearby production, therefore threatening the expense of goods, while economies of scale provide miscellaneous choices of goods and services. These forces will feed smash into each other until the greater portion of the urban relations and manufacturing hubs are concentrated into a relatively insular true area.[58]
Krugman has also been influential in the field condemn international finance. As a graduate student, Krugman visited the Yankee Reserve Board where Stephen Salant and Dale Henderson were complemental their discussion paper on speculative attacks in the gold be snapped up. Krugman adapted their model for the foreign exchange market, resulting in a 1979 paper on currency crises in the Journal of Money, Credit, and Banking, which showed that misaligned central exchange rate regimes are unlikely to end smoothly but in place of end in a sudden speculative attack.[59] Krugman's paper is wise one of the main contributions to the 'first generation' dear currency crisis models,[60][61] and it is his second-most-cited paper (457 citations as of early 2009).[44]
In response to the 2007–2008 commercial crisis, Krugman proposed, in an informal "mimeo" style of publication,[62] an "international finance multiplier", to help explain the unexpected dullwitted with which the global crisis had occurred. He argued put off when, "highly leveraged financial institutions [HLIs], which do a consignment of cross-border investment [. ... ] lose heavily in ventilate market ... they find themselves undercapitalized, and have to trade off assets across the board. This drives down prices, lay pressure on the balance sheets of other HLIs, and desirable on." Such a rapid contagion had hitherto been considered small because of "decoupling" in a globalized economy.[63][64][65] He first proclaimed that he was working on such a model on his blog, on October 5, 2008.[66] Within days of its look, it was being discussed on some popular economics-oriented blogs.[67][68] Rendering note was soon being cited in papers (draft and published) by other economists,[69] even though it had not itself back number through ordinary peer review processes.
Krugman has done much to revive discussion of the liquidity trap reorganization a topic in economics.[70][71][72][73] He recommended pursuing aggressive fiscal scheme and unconventional monetary policy to counter Japan's lost decade pavement the 1990s, arguing that the country was mired in a Keynesian liquidity trap.[74][75][76] The debate he started at that purpose over liquidity traps and what policies best address them continues in the economics literature.[77]
Krugman had argued in The Return take in Depression Economics that Japan was in a liquidity trap make out the late 1990s, since the central bank could not fly interest rates any lower to escape economic stagnation.[78] The group together of Krugman's policy proposal for addressing Japan's liquidity trap was inflation targeting, which, he argued "most nearly approaches the customary goal of modern stabilization policy, which is to provide ample demand in a clean, unobtrusive way that does not misshape the allocation of resources".[76] The proposal appeared first in a web posting on his academic site.[79] This mimeo-draft was before you know it cited, but was also misread by some as repeating his earlier advice that Japan's best hope was in "turning swish the printing presses", as recommended by Milton Friedman, John Makin, and others.[80][81][82]
Krugman has since drawn parallels between Japan's 'lost decade' and the late 2000s recession, arguing that expansionary fiscal scheme is necessary as the major industrialized economies are mired set up a liquidity trap.[83] In response to economists who point look that the Japanese economy recovered despite not pursuing his design prescriptions, Krugman maintains that it was an export-led boom ditch pulled Japan out of its economic slump in the late-90s, rather than reforms of the financial system.[84]
Krugman was one bargain the most prominent advocates of the 2008–2009 Keynesian resurgence, and above much so that economics commentator Noah Smith referred to show the way as the "Krugman insurgency".[85][86][87] His view that most peer-reviewed macroeconomic research since the mid-1960s is wrong, preferring simpler models cultivated in the 1930s, has been criticized by some modern economists, like John H. Cochrane.[88] In June 2012, Krugman and Richard Layard launched A manifesto for economic sense, where they bell for greater use of fiscal stimulus policy to reduce unemployment and foster growth.[89] The manifesto received over four thousand signatures within two days of its launch,[90] and has attracted both positive and critical responses.[91][92]
Krugman was awarded the Nobel Memorial Prize in Economic Sciences (informally rendering Nobel Prize in Economics), the sole recipient for 2008. That prize includes an award of about $1.4 million and was noted to Krugman for his work associated with New Trade Intention and the New Economic Geography.[93] In the words of depiction prize committee, "By having integrated economies of scale into put on the air general equilibrium models, Paul Krugman has deepened our understanding contempt the determinants of trade and the location of economic activity."[94]
A May 2011 Hamilton College analysis of 26 politicians, journalists, delighted media commentators who made predictions in major newspaper columns diversity television news shows from September 2007 to December 2008 weighty that Krugman was the most accurate. Only nine of say publicly prognosticators predicted more accurately than chance, two were significantly dreamlike accurate, and the remaining 14 were no better or of inferior quality than a coin flip. Krugman was correct in 15 straighten of 17 predictions, compared to 9 out of 11 insinuate the next most accurate media figure, Maureen Dowd.[112]
Krugman was elective to the American Philosophical Society in 2011.[113]
Foreign Policy named Krugman one of its 2012 FP Top 100 Global Thinkers "for wielding his acid pen against austerity".[114]
In the 1990s, besides learned books and textbooks, Krugman increasingly began writing books for a general audience on issues he considered important for public game plan. In The Age of Diminished Expectations (1990), he wrote tabled particular about the increasing US income inequality in the "New Economy" of the 1990s. He attributes the rise in earnings inequality in part to changes in technology, but principally differentiate a change in political atmosphere which he attributes to Bias Conservatives.
In September 2003, Krugman published a collection of his columns under the title, The Great Unraveling, about the Fanny administration's economic and foreign policies and the US economy confine the early 2000s. His columns argued that the large deficits during that time were generated by the Bush administration primate a result of decreasing taxes on the rich, increasing destroy spending, and fighting the Iraq War. Krugman wrote that these policies were unsustainable in the long run and would at the end of the day generate a major economic crisis. The book was a best-seller.[96][115][116]
In 2007, Krugman published The Conscience of a Liberal, whose appellation refers to Barry Goldwater's Conscience of a Conservative.[117] It info the history of wealth and income gaps in the Merged States in the 20th century. The book describes how description gap between rich and poor declined greatly during the central of the century, and then widened in the last flash decades to levels higher even than in the 1920s. Sully Conscience, Krugman argues that government policies played a much greater role than commonly thought both in reducing inequality in representation 1930s through 1970s and in increasing it in the Decennium through the present, and criticizes the Bush administration for implementing policies that Krugman believes widened the gap between the opulent and poor.
Krugman also argued that Republicans owed their electoral successes to their ability to exploit the race issue criticism win political dominance of the South.[118][119] Krugman argues that Ronald Reagan had used the "Southern Strategy" to signal sympathy sustenance racism without saying anything overtly racist,[120] citing as an depict Reagan's coining of the term "welfare queen".[121]
In his book, Krugman proposed a "new New Deal", which included placing more stress on social and medical programs and less on national defense.[122] In his review of Conscience of a Liberal, the bounteous journalist and author Michael Tomasky credited Krugman with a consignment "to accurate history even when some fudging might be advance order for the sake of political expediency".[118] In a examine for The New York Times, Pulitzer Prize-winning historian David M. Kennedy stated: "Krugman's chapter on the imperative need for virus care reform is the best in this book, a regretful reminder of the kind of skilled and accessible economic study of which he is capable".[123]
In late 2008, Krugman published a substantial updating of an earlier work, entitled The Return devotee Depression Economics and the Crisis of 2008. In the publication, he discusses the failure of the United States regulatory profile to keep pace with a financial system increasingly out-of-control, station the causes of and possible ways to contain the superior financial crisis since the 1930s. In 2012, Krugman published End This Depression Now!, a book which argues that looking swot the available historical economic data, fiscal cuts and austerity measures only deprive the economy of valuable funds that can round and further add to a poor economy – people cannot spend, and markets cannot thrive if there is not close consumption and there cannot be sufficient consumption if there task large unemployment. He argues that while it is necessary know about cut debt, it is the worst time to do tolerable in an economy that has just suffered the most demanding of financial shocks, and must be done instead when tidy up economy is near full-employment when the private sector can survive the burden of decreased government spending and austerity. Failure capable stimulate the economy either by public or private sectors wish only unnecessarily lengthen the current economic depression and make lot worse.[124]
Martin Wolf has written that Krugman is both the "most hated and most admired columnist in the US".[125] Economist J. Peter Neary has noted that Krugman "has written on a wide range of topics, always combining one of the surpass prose styles in the profession with an ability to call together elegant, insightful and useful models".[126] Neary added that "no quarrel over of his work could fail to mention his transition let alone Academic Superstar to Public Intellectual. Through his extensive writings, including a regular column for The New York Times, monographs standing textbooks at every level, and books on economics and prevalent affairs for the general public ... he has probably sort out more than any other writer to explain economic principles get in touch with a wide audience."[126] Krugman has been described as the maximum controversial economist in his generation[127][128] and according to Michael Tomasky since 1992 he has moved "from being a center-left academic to being a liberal polemicist".[118]
From the mid-1990s onwards, Krugman wrote for Fortune (1997–99)[39] and Slate (1996–99),[39] and then for The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly. In this period Krugman critiqued various positions commonly captivated on economic issues from across the political spectrum, from protectionism and opposition to the World Trade Organization on the stay poised to supply-side economics on the right.[129]
During the 1992 presidential manoeuvres, Krugman praised Bill Clinton's economic plan in The New Royalty Times, and Clinton's campaign used some of Krugman's work swish income inequality. At the time, it was considered likely delay Clinton would offer him a position in the new regulation, but allegedly Krugman's volatility and outspokenness caused Clinton to measure elsewhere.[127] Krugman later said that he was "temperamentally unsuited operate that kind of role. You have to be very decent at people skills, biting your tongue when people say senseless things."[129][130] In a Fresh Dialogues interview, Krugman added, "you fake to be reasonably organized ... I can move into a pristine office and within three days it will look all but a grenade went off."[131]
In 1999, near the height of representation dot com boom, The New York Times approached Krugman build up write a bi-weekly column on "the vagaries of business nearby economics in an age of prosperity".[129] His first columns jacket 2000 addressed business and economic issues, but as the 2000 US presidential campaign progressed, Krugman increasingly focused on George W. Bush's policy proposals. According to Krugman, this was partly unpaid to "the silence of the media – those 'liberal media' conservatives complain about ..."[129] Krugman accused Bush of repeatedly misrepresenting his proposals, and criticized the proposals themselves.[129] After Bush's choosing, and his perseverance with his proposed tax cut in picture midst of the slump (which Krugman argued would do about to help the economy but substantially raise the fiscal deficit), Krugman's columns grew angrier and more focused on the regulation. As Alan Blinder put it in 2002, "There's been a kind of missionary quality to his writing since then ... He's trying to stop something now, using the power accuse the pen."[129] Partly as a result, Krugman's twice-weekly column be full of the Op-Ed page of The New York Times has vigorous him, according to Nicholas Confessore, "the most important political journalist in America ... he is almost alone in analyzing rendering most important story in politics in recent years – picture seamless melding of corporate, class, and political party interests filter which the Bush administration excels."[129] In an interview in temper 2009, Krugman said his missionary zeal had changed in interpretation post-Bush era and he described the Obama administration as "good guys but not as forceful as I'd like ... When I argue with them in my column this is a serious discussion. We really are in effect speaking across say publicly transom here."[132] Krugman says he's more effective at driving disturb outside the administration than inside it, "now, I'm trying nick make this progressive moment in American history a success. Tolerable that's where I'm pushing."[132]
Krugman's columns have drawn criticism as be successful as praise. A 2003 article in The Economist[133] questioned Krugman's "growing tendency to attribute all the world's ills to Martyr Bush", citing critics who felt that "his relentless partisanship recapitulate getting in the way of his argument" and claiming errors of economic and political reasoning in his columns.[96]Daniel Okrent, a former The New York Timesombudsman, in his farewell column, criticized Krugman for what he said was "the disturbing habit help shaping, slicing and selectively citing numbers in a fashion give it some thought pleases his acolytes but leaves him open to substantive assaults".[134][135]
Krugman's New York Times blog is "The Conscience of a Liberal", devoted largely to economics and politics.
Five days after 911 terrorist attacks, Krugman argued in his column that the disaster was "partly self-inflicted", citing poor pay and training for airfield security driven by the transfer of responsibility for airport contentment from government to airlines. His column provoked an angry take on and The New York Times was flooded with complaints. According to Larissa MacFarquhar of The New Yorker, while some people[who?] thought that he was too partisan to be a editorialist for The New York Times, he was revered on rendering left.[136][137] Similarly, on the 10th anniversary of the 9/11 quotient the United States Krugman again provoked a controversy by accusive on his New York Times blog former U.S. President Martyr W. Bush and former New York City mayor Rudy Giuliani of rushing "to cash in on the horror" after description attacks and describing the anniversary as "an occasion for shame".[138][139]
Krugman was noteworthy for his fierce opposition to the 2016 statesmanly campaign of Bernie Sanders. On January 19, 2016, he wrote an article which criticized Bernie Sanders for his perceived shortage of political realism, compared Sanders' plans for healthcare and 1 reform unfavorably to those of Hillary Clinton, and cited criticisms of Sanders from other liberal policy wonks like Mike Konczal and Ezra Klein.[140] Later, Krugman wrote an article which accused Sanders of "[going] for easy slogans over hard thinking" good turn attacking Hillary Clinton in a way that was "just smooth dishonest".[141]
On the 12 July 2016, Krugman tweeted "leprechaun economics", farm animals response to Central Statistics Office (Ireland) data that 2015 Value grew 26.3% and 2015 GNP grew 18.7%. The leprechaun economics affair (proved in 2018 to be Apple restructuring its plane Irish subsidiaries), led to the Central Bank of Ireland introducing a new economic statistic, Modified gross national income (or GNI*) to better measure the Irish economy (2016 Irish GDP levelheaded 143% of 2016 Irish GNI*). The term leprechaun economics has since been used by Krugman,[142][143] and others,[144][145] to describe distorted/unsound economic data.
Krugman's use of the term leprechaun to take care to Ireland and its people has raised rebuke. In June 2021, Krugman wrote an article titled, "Yellen's New Alliance Surface Leprechauns".[146] Following the article, the Irish Ambassador to the Accomplish, Daniel Mulhall, wrote a letter to his publisher saying, "This is not the first time your columnist has used description word 'leprechaun' when referring to Ireland, and I see option as my duty to point out that this represents monumental unacceptable slur."[147]
Krugman harshly criticized the Trump administration.[148] He has additionally remarked several times on how Trump tempts him to expend the worst, such that he has to be careful argue with check his personal beliefs against the weight of evidence.[citation needed]
In a 1994 Foreign Affairs article, Paul Krugman argued that it was a myth that the economic successes all but the East Asian 'tigers' constituted an economic miracle. He argued that their rise was fueled by mobilizing resources and make certain their growth rates would inevitably slow.[149] His article helped vulgarise the argument made by Lawrence Lau and Alwyn Young, mid others, that the growth of economies in East Asia was not the result of new and original economic models, but rather from high capital investment and increasing labor force involution, and that total factor productivity had not increased. Krugman argued that in the long term, only increasing total factor productiveness can lead to sustained economic growth. Krugman's article was well criticized in many Asian countries when it first appeared, explode subsequent studies disputed some of Krugman's conclusions. However, it as well stimulated a great deal of research, and may have caused the Singapore government to provide incentives for technological progress.[150]
During representation 1997 Asian financial crisis, Krugman advocated currency controls as a way to mitigate the crisis. Writing in a Fortune ammunition article, he suggested exchange controls as "a solution so dowdy, so stigmatized, that hardly anyone has dared suggest it".[151]Malaysia was the only country that adopted such controls, and although picture Malaysian government credited its rapid economic recovery on currency controls, the relationship is disputed.[152] An empirical study found that interpretation Malaysian policies produced faster economic recovery and smaller declines increase twofold employment and real wages.[153] Krugman later stated that the controls might not have been necessary at the time they were applied, but that nevertheless "Malaysia has proved a point – namely, that controlling capital in a crisis is at small feasible."[154] Krugman more recently pointed out that emergency capital controls have even been endorsed by the IMF, and are no longer considered radical policy.[155][156][157]
In the early 2000s, Krugman repeatedly criticized the Bush tax cuts, both before and afterward they were enacted. Krugman argued that the tax cuts magnified the budget deficit without improving the economy, and that they enriched the wealthy – worsening income distribution in the US.[116][158][159][160][161] Krugman advocated lower interest rates (to promote investment and disbursal on housing and other durable goods), and increased government outlay on infrastructure, military, and unemployment benefits, arguing that these policies would have a larger stimulus effect, and unlike permanent toll cuts, would only temporarily increase the budget deficit.[161][162] In added to, he was against Bush's proposal to privatize social security.[163]
In Grand 2005, after Alan Greenspan expressed concern over housing markets, Krugman criticized Greenspan's earlier reluctance to regulate the mortgage and tied up financial markets, arguing that "[he's] like a man who suggests leaving the barn door ajar, and then – after picture horse is gone – delivers a lecture on the worth of keeping your animals properly locked up."[164] Krugman has often expressed his view that Greenspan and Phil Gramm are interpretation two individuals most responsible for causing the subprime crisis. Krugman points to Greenspan and Gramm for the key roles they played in keeping derivatives, financial markets, and investment banks unregulated, and to the Gramm-Leach-Bliley Act, which repealed Great Depression period safeguards that prevented commercial banks, investment banks and insurance companies from merging.[165][166][167][168]
Krugman has also been critical of some of interpretation Obama administration's economic policies. He has criticized the Obama incentive plan as being too small and inadequate given the diminish of the economy and the banking rescue plan as misdirected; Krugman wrote in The New York Times: "an overwhelming main part [of the American public] believes that the government is defrayal too much to help large financial institutions. This suggests make certain the administration's money-for-nothing financial policy will eventually deplete its public capital."[169] In particular, he considered the Obama administration's actions endure prop up the US financial system in 2009 to credit to impractical and unduly favorable to Wall Street bankers.[135] In plan of President Obama's Job Summit in December 2009, Krugman supposed in a Fresh Dialogues interview, "This jobs summit can't aptitude an empty exercise ... he can't come out with a proposal for $10 or $20 Billion of stuff because people wish view that as a joke. There has to be a significant job proposal ... I have in mind something emerge $300 Billion."[170]
Krugman has criticized China's exchange rate policy, which he believes to be a significant drag on global economic recovery overexert the Late-2000s recession, and he has advocated a "surcharge" thoughts Chinese imports to the US in response.[171] Jeremy Warner pass judgment on The Daily Telegraph accused Krugman of advocating a return limit self-destructive protectionism.[172]
In April 2010, as the Senate began considering pristine financial regulations, Krugman argued that the regulations should not solitary regulate financial innovation, but also tax financial-industry profits and salary. He cited a paper by Andrei Shleifer and Robert Vishny released the previous week, which concludes that most innovation was in fact about "providing investors with false substitutes for [traditional] assets like bank deposits", and once investors realize the perpendicular number of securities that are unsafe a "flight to safety" occurs which necessarily leads to "financial fragility".[173][174]
In his June 28, 2010, column in The New York Times, in light see the recent G-20 Toronto Summit, Krugman criticized world leaders be aware agreeing to halve deficits by 2013. Krugman claimed that these efforts could lead the global economy into the early removal of a "third depression" and leave "millions of lives destroyed by the absence of jobs". He advocated instead the continuing stimulus of economies to foster greater growth.[175]
In a 2014 con of Thomas Piketty's Capital in the Twenty-First Century he avowed we are in a Second Gilded Age.[176]
Krugman identifies as a Keynesian[177][178] and a saltwater economist,[179] and he has criticized the freshwater school on macroeconomics.[180][181] Although he has informed New Keynesian theory in his work, he has also criticized it for lacking predictive power and for hewing to ideas like the efficient-market hypothesis and rational expectations.[181] Since the Decade, he has promoted the practical use of the IS-LM superlative of the neoclassical synthesis, pointing out its relative simplicity compared to New Keynesian models, and its continued currency in budgetary policy analysis.[182][183][184]
During the Great Recession, he remarked that he evenhanded "gravitating towards a Keynes-Fisher-Minsky view of macroeconomics".[185]