Paul Krugman’s Austrian Obsession

Source: Ludwig von Mises Institute
by William L Anderson

“Paul Krugman seems to have a very unhealthy obsession with Austrian economics and especially the school’s theory of the business cycle. More than two decades ago, he attacked it (wrongly calling it a ‘Hangover Theory’ and trying to make a morality play out of it), claiming it had the credibility of the ‘phlogiston theory of fire.’ Not surprisingly, he got the theory wrong then but has decided to dig that hole of willful ignorance even deeper with a recent attack in the New York Times. Like most Krugman posts, it has more economic fallacies than one can debunk in a short article, so I will stay with one point: Krugman’s belief that inflation is a cure-all to recessions and that anyone who opposes it does so out of ignorance at best and malevolence at worst.” (09/09/21)