I just posted this comment over at The Money Illusion:
Scott, I don’t hope to convince you on this point, but for any innocent reader: I want to say for the record that Paul Krugman–my nemesis–has, since the late 1990s, consistently said that what Japan needs to do, to escape from the zero-bound liquidity trap, is to convince the public it will engage in future inflation.
Thus, I find it weird that when Japanese policymakers appear to be implementing Krugman’s solution, and it seems to be working just as he predicted, that Scott Sumner thinks this somehow embarrasses the Keynesians.
When Krugman is vanquished on the battlefield of ideas, I insist that it be a fair fight.
P.S. By “appears to be working” I just mean that the yen is falling, which is the evidence to which Scott points. I’m not saying the promise of more inflation by the BoJ is “working” the way Krugman/Sumner think, in terms of fixing the economy.