Why read Paul Krugman for macroeconomics?

I assign some Paul Krugman readings in my Macroeconomics class and because he is such a polarizing character, some people on both the right and the left seem to think he is just a blowhard.  If you are one of them, I think it is worth reading why you should read some of Krugman’s economics.

Although Paul Krugman is a controversial public intellectual, he has garnered tremendous professional respect. His Wikipedia entry lists numerous professional honors that he has won for his accomplishments including the Nobel Prize in Economics in 2008.  Although he is an outspoken liberal in his politics, he also gets a lot of attention and even respect from many conservatives for his economics.  For example, he was the favorite liberal economist among the conservatives at Econlog, a conservative (libertarian) organization. Another libertarian organization called Econ Journal Watch found him to be far and away the most popular economist under age 60 in a poll of professional economists (PDF).  Unlike most academic economists, he is a good writer who has a long history of explaining economics for general audiences.  According to web traffic, he has been by far the most read economics news and commentary writer on the internet since at least 2007, and his blog has sometimes gotten about as many readers as entire websites like The Onion.

Krugman was one of the few people who predicted some important parts of the the 2008 economic crisis. His predictions were not good enough to make money on like the guys Michael Lewis wrote about in The Big Short (an incredible story), but Krugman did predicted that the end of the real estate bubble would cause an economic crisis and once we were in the crisis, his predictions about inflation and monetary policy were better than most.

In addition to writing about economics, Krugman writes about politics and music on his blog.  Although Krugman is a great economist whose economic judgment I respect, I don’t see any reason to regard his ideas about other matters like politics and music as having more expertise than the average writer about these matters.

Once you separate Krugman’s economics from his politics, you can see that many of his economic theories have gotten a lot of support from conservatives.  One year when I taught Macroeconomics with a class of majority conservative students I assigned Krugman’s Return of Depression Economics and Raghuram Rajan’s Fault Lines. Although Rajan is a conservative economist and Krugman is a liberal, my students had a hard time finding much partisan bias in either book and some actually felt like Rajan’s thesis seemed more liberal because blamed rising inequality in the US as one of the root causes of the financial crisis.

Although it is impossible to completely separate economics and politics, most of the politics that influence macroeconomic theories are completely different from the political values that 95% of non-economists care about, so most of my students don’t see any strong political valence in most of the economics we read.

Posted in Macro

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