Paul Krugman

US inflation will come down without an early-1980s-style deep recession.

“So it probably won't be necessary to put the economy through an '80s-style wringer to get inflation down.”

Said on

24 March 2022 · New York Times column "How High Inflation Will Come Down", quoted on Philip Greenspun's blog

Source

Professor Krugman's Nobel-grade thinking about inflation · Philip Greenspun's Weblog

Should come true

No date given

How sure they sounded

probably

Categories

Economy

Importance

3 of 5 · Whether the US could disinflate without a severe recession shaped Fed policy and the national economy.

Outcome

Accurate Happened 30 June 2023.

CPI inflation fell from a 9.1 percent peak in June 2022 to 3.0 percent in June 2023, and NBER has dated no recession after the 2020 one. Unemployment stayed below 4 percent through 2023, so there was no early-1980s-style wringer, though inflation did get worse before it got better, as he also said.

Evidence:

• https://bankingjournal.aba.com/2023/07/inflation-slowed-down-to-3-in-june/
• https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions