Paul Krugman: That 80s Show

I’ve been giving various talks and fireside chats here in Oxford, and one thing I keep coming back to is the pivotal role of the 1980s in the development of economic thought.

This isn’t what you usually hear — the 70s have taken on mythical status, and are constantly invoked by inflation worriers, while the 80s get mentioned, if at all, as somehow proving the truth of supply-side economics. But what really happened in the early 80s was a decisive refutation of Lucasian macroeconomics — albeit a refutation met in many places with denial.