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Krugman: Bitcoin bubble is nice

bitcoin bubble

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On 19/10/2014
Last modified:20/05/2015


Krugman: Bitcoin bubble is nice. Is a bitcoin bubble real ?

Krugman: Bitcoin bubble is nice

Bitcoin bubble may be the only thing that gives us a sense of prosperity

Bitcoin bubble are good or bad? And they are a “necessary evil on the path to strong economic growth and better jobs? According to Krugman can not be answered unequivocally. “Bitcoin bubbles are bad when approaching full employment status. In such a case, lead to poor allocation of resources and pave the way for financial instability,” says noted economist. But when the economy is depressed, and may otherwise unhealthy consumption supported to help create jobs. So bitcoin bubble may not be entirely a bad thing.

Krugman: Bitcoin bubble is nice and bitcoin has no future

Paul Krugman has a lot of interesting notch on the barrel, like the Nobel Prize in economics. But a few predictions that are even remotely fulfilled. For Princeton Magazine was talking about topics that he might in a few years someone will remind ironically. We’ll see.

Paul Krugman specifically stated that there are reasons to think that the economy will be long-term rather weak, and so will just bubble period, only, during which the people will feel rich, and when they perceive the economy as a whole prosperous.

Why inflation remains low despite the increasing volume of money in the system?


Paul Krugman explains that inflation in the economy works both ways the rise in prices logically increases the cost of some entrepreneurs, low inflation or deflation but lengthens the downturn of the economy. Finding therefore balance. In the 90 years it was believed that the ideal balance for economic success is somewhere around 2% rate of consumer inflation, shows, however, that the effects of low inflation are higher than thought,” warns economist. Therefore advocated by the inflation rate of around 4% year on year.

So why inflation (in the USA, but with an even bigger problem facing mature Europe), despite the extreme monetary easing remains low? “History teaches us that at the time of minimum interest rates of the new money in the economy too short and not moving economic activity, and hence do not increase inflation. Some of us repeat it since 2009 or 2010 What else needs to happen for us other believedKrugman reheated to your soup. In this case, about the law.

Not surprisingly, the question of whether the low rates and quantitative easing, the Fed had an adverse effect on the pension portfolio generation of baby boomers (through a fall in bond yields), said that rates are still high and that the Fed is not within its mandate to deal with certain income groups .

It is a viable bitcoin currency and will increase in importance?


Savvy readers may suspect that, as Krugman in question to support the economy through monetary policy may point into the black at least until it eventually turns out that printing money” and the maintenance of minimum rates made ​​provision for a not quite pleasant bubbles and other problems in the economy the topic of digital currency”  bitcoin bubble is skating on thin ice. His crystal ball says, he said that bitcoin bubble does not expect significant future.

Using bitcoin is more complicated than using other forms of electronic payment. This currency has no fundamental source of value. Perhaps Bitcoin will succeed somehow live from nature, nurture their own story, but is currently leaning toward the fact that the system simply collapses,” remains Krugman conservative.


These words certainly carefully wrote down those who practice ironic archive of Paul Krugman On this site we read, among other things, what was already a famous economist predicted the Internet in 1998. These words remind us that the author sometimes simply doesnt strike (this particular case would be about football called “dont strike or goal line“).

“The growth of the Internet drastically slows down. Most people have with what others say. Around the year 2005 shows that the influence of the Internet on the economy was greater than that of an ordinary fax. As soon as the rate of development in the field of computer states, jobs in the IT industry begin to grow slower until they finally begins to wane. During the ten years we will term information economy sound stupid.

Krugman: Bitcoin bubble is nice. Is a bitcoin bubble real ?

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