In his column today, “A Whiff of Stagflation,” Paul Krugman correctly notes that we may be in for a rise in stagflation. Unfortunately, he then goes on to demonstrate why his John Bates Clark award should be revoked. (I often have fantasized of holding a “defrocking” ceremeony for people like Krugman in which we rip the stripes from his gown, cut his hood, and rip up his diploma.) The cause of inflation in Krugmanland? Why it is HIGHER PRICES. Yes, fellow economists, the cause of inflation is the fact that prices rise.
One would like to think that we have gone beyond the stupidity of “cost-push” inflation, but it apparently is showing its ugly face again. One wonders if the economics students at Princeton should sue for malpractice.
