Paul Krugman is an American economist and a distinguished professor of economics. He has written about macroeconomics, social policy, trade, and healthcare. In 2008, he received the Nobel Prize for the analysis of trade patterns and location of economic activity. He has since written books about economics that are intended for the general public. Krugman has been a strong critic of the current policies and the Keynesian Macroeconomic approach. The result is that he has attract several critics that have tried to show that his works were not based on accurate analysis of the macroeconomy but are instead a political endeavor. This paper analyzes three articles that discuss about Paul Krugman’s views of various economic policies.
The article titled “Paul Krugrman” by Briggeman (2011) explores the life of Krugman, his various works and ideologies, and various factors that have influenced his works. Krugman majored in economics as an undergraduate student at Yale. He wrote multiple papers between 1978 and 1980 where he explored the phenomena of international trade. Briggeman (2011) observes how Krugman embraced a crusading partisanship with the early days of the Bush Administration. He addressed various topics and opinions like national interest taking precedence over international trade, stricter working conditions, and minimum wage legislation.
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The article titled “What’s Wrong with Economics: A Discussion Between Paul Krugman and Jeff Madrick” was a transcript discussion between Paul Krugman and Jeff Madrick where the two discussed about various economic issues. One of the most notable topics in the discussion was keeping the inflation rate at 2 percent a year. Krugman argued that there was no empirical evidence suggesting that raising or reducing the inflation rate would negatively impact unemployment. Nevertheless, the Fed and government was not willing to make any adjustments.
The article titled “How Did Paul Krugman Get it So Wrong” by Cochrane (2011) criticizes Krugman’s observations from the New York Times Magazine article titled ‘ How Did Economics Get it So Wrong?’. The central focus of Cochrane (2011) was to show that Krugman’s observations of the macroeconomic policy was completely misleading. The article addresses various topics such as market efficiency, the case for free markets, stimulus, the 2008 ‘crash’, and the future of economics. Cochrane shows that Krugman was wrong in trying to disprove the Keynesian economics that has been in operation for several years now.
The analysis of the introduction of the different articles provide an understanding in the works of Krugman. Briggeman (2011) begins the article by exploring Krugman’s early studies in economics and how it has influenced his current research. For instance, he wrote several papers between 1978 and 1980 that illuminated the phenomena of international trade. The discussion between Krugman and Madrick reveal various information about how mainstream economists have negatively damaged America and the world at large. Cochrane (2011) introduces the article by indicating that Krugman’s statements that the Keynesian economics that have been in operation since the 1930s are wrong is simply misleading.
There are multiple gaps that are existent in all the different articles. Briggeman (2011) only strives to provide an overview of the various works written by Krugman. However, he does not explore in-depth specific policies, their impacts, and criticizing them. The discussion between Krugman and Madrick is also limited by providing a discussion on the interest rates and the economic crisis. Cochrane (2011) thoroughly criticizes Krugman’s views based on a single article in the New York Times Magazines. He fails to consider that Krugman has raised various topics that have led to the formulation of policies used to prevent financial crisis.
The three articles strive to address Krugman’s perspective on the 2008 crash. Briggeman (2011) observes that Krugman lost confidence in the markets generally after the crash. He called for an increase in policies, regulations, and more taxation to limit the risks of crisis. The observation was that the markets were imperfect enough to generate the massive waste experienced in the year 2008. The transcript discussion between Paul Krugman and Jeff Madrick also observed that the 2008 crash led to a rethinking of the importance of increased financial regulation that could be part of macroeconomic policy. Krugman criticizes the current approach by the Fed to neglect the Keynesian as a fiscal policy leading to various economic crises. Cochrane (2011) objects Krugman’s perspective on the 2008 market crash by indicating that he does not consider what caused the crash, the policies that could have prevented it, and policies that might prevent it. Cochrane (2011) observes that it is impossible to anticipate the future and that the market learns with time.
The three articles also explore the economic impact that Krugman has had on general macroeconomic policy. He won the Nobel prize for his topic on trade. He has also raised a significant debate regarding simply accepting the current free market and the Keynesian economy. Briggeman (2011) observes that Krugman wrote papers that have motivated the current policy debates that have been used to prevent future financial crisis. Cochrane (2011) discusses various issues raised by Krugman regarding increased government regulations and the future of economics. Various arguments such as a fiscal stimulus can impact the economy. The discussion between Krugman and Madrick also showed that Krugman took an active approach in advising the Fed. The main proposition was that there was a need to increase the inflation rate as it would provide a price stability and make it easy to deal with various types of crises. While the Fed has not implemented the approach, it has responded by increasing the levels of regulations in the market by formulating various laws and policies that impact the operations of various financial organizations.
In conclusion, the three articles take an in-depth view of the economic policies of Krugman and their impacts. Briggeman (2011) analyzes various works and the contribution of Krugman on various macroeconomic policies. Krugman and Madrick discuss the inflation rate, the 2008 crisis, and how it could have been prevented. Cochrane (2011) criticizes Krugman’s perspective after he observed that the current market system is inherently flawed.
References
Briggeman, J. (2013). Paul Krugman. Econ Journal Watch, 10(3), 400–410. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=94876820&site=ehost-live&authtype=uid&user=grantham&password=Research1951 !
Cochrane, J. H. (2011). How Did Paul Krugman Get It so Wrong? Economic Affairs, 31(2), 36–40.
What’s Wrong with Economics: A Discussion Between Paul Krugman and Jeff Madrick. (2015). Challenge (05775132), 58(2), 112–134.
