Politics determines who has the power, not who has the truth.
Paul KrugmanRead
If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God.
Interpretation
What this quote means
The unemployment rate is largely influenced by the decisions of key figures, such as Greenspan, while also being subject to unpredictable factors.
In this quote, Paul Krugman suggests that the projection of the unemployment rate in the United States is heavily reliant on the intentions or predictions of influential economic leaders, particularly Alan Greenspan, who was known for his significant impact on monetary policy. The phrase indicates that while these leaders have substantial control, there is also an inherent unpredictability in economic outcomes due to a multitude of unforeseen variables.
Themes
UnemploymentEconomicsPredictionGreenspan
In practice
Example use cases
In a discussion about economic forecasting during a seminar on macroeconomics.
More from Paul Krugman
All quotes →Our popular economics writers, however, are not in the business of giving their readers a ringside seat on the research action; with no exception I can think of, they use their books to do an end run around the normal structure of scholarship, to preach ideas that few serious economists share. Often, these ideas are not just at odds with the professional consensus; they are demonstrably wrong, and sometimes terminally silly. But they sound good to the unwary reader.
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The raw fact is that every successful example of economic development this past century ... has taken place via globalization.
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Wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.
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It’s not about the budget; it’s about the power...So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t.
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The economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.
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