Friday, November 23, 2018

22 Days in Paul Krugman's Masterclass (Day 6) (A Disjointed Lesson)

Paul Krugman
Lesson 6 in Paul Krugman's Masterclass is 14 minutes and 25 seconds long.

In this class, he discusses banking and also bubbles and business cycles. It is a disjointed lesson.

He discusses bank runs as though they are an inevitable part of the structure of banking, never differentiating between a fractional reserve system (which is subject to bank runs) and a 100%  reserve bank system.

It is really quite remarkable to witness the lack of depth in Krugman's thinking about the banking system.

For a correct detailed coverage of the different banking structures. see The Mystery of Banking by Murray Rothbard.

Krugman then goes on to discuss bubbles and the business cycle but never once ties the bubbles and business cycles to the printing of money that distorts the economy.

For proper coverage of this topic, see Austrian School Business Cycle Theory by Murray Rothbard.

Once again from Krugman, we see an exposition that should only gain, a high school freshman taking his first economics course, a grade of C-.

His discussion is extremely simplistic, missing all the important points and confusing the causal factors.

I give Nobel Prize-winner Krugman yet another F-.

-RW 

Links to discussions of all Krugman's Masterclass lessons are here.




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