Economist Steve Hanke Blasts Nobel Laureate Paul Krugman’s ‘Global Phenomenon’ Inflation Remark

Johns Hopkins University applied economics professor Steven Hanke has lambasted fellow economist and Nobel laureate Paul Krugman’s claim that inflation is a “global phenomenon.” Paul Krugman suggested that progressive U.S. citizens can still be convinced that the Biden administration has done well with the economy.

Krugman Accused of Spreading Disinformation

Steve Hanke, a professor of applied economics at Johns Hopkins University, has criticized fellow economist and Nobel laureate Paul Krugman for claiming that inflation is a “global phenomenon.” In a post on X (formerly Twitter), Hanke characterized Krugman’s latest op-ed article in the New York Times as another of the Nobel laureate’s disinformation pieces.

In his Dec. 7 installment, Krugman argues the case for Bidenomics, a term used to describe the economic policies of U.S. President Joe Biden. While he has given up on persuading conservatives, Krugman suggested that progressive U.S. citizens can still be convinced that the Biden administration has done well with the economy.

To support the assertion that the U.S. economy has done well during the Biden presidency, Krugman points to the rise in the labor productivity rate in the third quarter. The Nobel laureate also referred to the unfilled job openings gap, which “has now largely disappeared.”

Dismissing claims that U.S. monetary authorities have failed to control inflation, Krugman directed readers’ attention to workers’ earnings, whose growth rate is said to have significantly outpaced the inflation rate.

However, in his Dec. 9 post on X, Hanke said it is wrong for Krugman to claim that the U.S. has contained inflation. He said:

“WRONG. Inflation is always and everywhere LOCAL, not GLOBAL. Where central banks control the money supply, inflation is low and stable. Just look at tiny, well-managed Switzerland, where inflation is 1.4%/yr. And giant China, the largest economy in the world (when measured on a PPP basis), where inflation is 0.2%/yr.”

Krugman Versus Hanke

The Johns Hopkins economics professor’s latest rejection of arguments put forward by Krugman is not the first time he has taken such a stance. In October, when Krugman declared victory in the United States’ war on inflation, Hanke similarly dismissed the Nobel laureate’s remarks.

The war on inflation is over. We won, at very little cost pic.twitter.com/opumf3nEvL

— Paul Krugman (@paulkrugman) October 12, 2023

Interestingly, when Hanke said the headache of inflation was gone in July, Krugman and another economist Mohamed El-Erian were reportedly not sure.

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