Paul Krugman, as many of you know, writes opinion pieces primarily about the economy.
In this article he talks about vairous viewpoints on inflation, and how most get it wrong.
His self- profile on NYT includes:
My Background
I’m an economist by training, with an original focus on international trade and finance, who taught at M.I.T. and Princeton University among other places, and am now a distinguished professor at City University of New York Graduate Center.
My pre-Times research was honored, among other things, with the 2008 Nobel Prize in economics. I am the author (or editor) of 27 books, and I am one of the founders of the “new trade theory,” a major rethinking of international trade that explains the emergence of new trade patterns between countries, based, in part, on how consumers started to seek out different brands for everyday products. I received my undergraduate degree at Yale University and my Ph.D. in economics from M.I.T. I grew up in Albany, N.Y.
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I am gifting you his latest article, and copying opening paragraphss below. Gifted articles allow you to read without being a subscriber.
www.nytimes.com/…
Over the past six months, the personal consumption expenditure deflator excluding food and energy — I know that’s a mouthful, but it’s the Federal Reserve’s preferred measure of underlying inflation — has risen at an annual rate of only 2.5 percent, down from 5.7 percent in March 2022.
The Fed’s inflation target is 2 percent, so we’re not quite there yet. And you shouldn’t expect the Fed to declare victory any time soon. As I can tell you from personal experience, anyone suggesting that inflation is more or less under control can expect an avalanche of hate mail and hostile commentary on social media. In fact, I believe that the vehemence with which some Americans insist that inflation is still running wild distorts coverage in conventional media, too, because journalists are deterred from saying anything positive. And the Fed has to be especially careful, because it would lose credibility if inflation went back up after sounding too optimistic. The truth, however, is that inflation is looking very much like yesterday’s problem.
But wait — don’t real people have to buy food and energy? Well, there are good reasons for policymakers to look at “core” measures excluding components that jump around a lot, but in case you’re interested, prices including food and energy have risen at an annual rate of … 2.5 percent, the same as core inflation.
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