I know this is a standard ploy–to decry your opponent not understanding undergrad economics–but how else can we interpret this recent statement from Krugman?
1. Even in microeconomics, we don’t insist on using models built up from maximizing behavior all the time. Exhibit A: supply and demand! I mean, we kind of know how something like the supply and demand curves can be derived from maximizing behavior, but it’s not all that easy, and nobody, nobody, insists that you do this derivation every time.
What in the world is he talking about, in the part I put in bold? I’m being dead serious; I have no idea what he can possibly mean. We literally derived supply and demand curves from maximizing consumer and producer behavior in my principles course. (It wasn’t actually 101, which is why I made the “mistake” in my post title.)
In case you think I’m taking an unfair shot at Krugman, let us not forget that a few months ago, he admitted that when he was writing up his textbook, he looked for a good example of supply curves that sloped upward in the real world, and he said he couldn’t find any. (!)
Hence I think it is literally an open question whether Paul Krugman understand Econ 201.
P.S. If anybody is a newcomer, here because you heard Tom Woods interview me on Peter Schiff’s show, here is the link to the Krugman Debate challenge.