May 26, 2012
The Nobel Prize-winning professor of economics talks to Martin Wolf about what Japan got right, what the Federal Reserve got wrong and how the eurozone can be saved.
I enter the Landmarc restaurant, at the Time Warner Center, on Columbus Circle, New York, where I have agreed to meet for lunch with Paul Krugman, the 2008 Nobel laureate in economics, Princeton professor of economics and international affairs, and liberal columnist of the New York Times. I know nothing about this bistro-style restaurant, which my guest has chosen for its convenience to a television interview he has just completed. The restaurant is impersonal and – it’s a late lunch, at two o’clock – beginning to empty.
Krugman, 59, most hated and most admired columnist in the US, rumpled and professorial, is sitting at a small table in the middle of the restaurant, working on his laptop. It is Thursday and he is writing his column. What, I ask, is it on? “It’s going to be Europe,” he replies. “Partly because it is coming to a head, partly because I am a little overstretched and that’s what I’m ready for. So I’m going to do that one.” I understand the feeling of being overstretched: Krugman is writing two columns a week, posting regularly on his blog, writing popular books and teaching.
So, I ask, will the argument of the column be that “it’s all over” for the eurozone?
“No. I don’t think they can save Greece but they can still save the rest if they’re willing to offer open-ended financing and macroeconomic expansion.” But this would mean persuading the Germans to change their philosophy of economic life. “Well, the prospect of hanging concentrates the mind; the prospect of a collapse of the euro might concentrate their minds.”
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