Saturday, April 4, 2015

The miracle of contradiction

How many times have we heard keynesians claim that minimum wages do not cause unemployemnt? How many times have we heard the same folks claim sticky wages cause unemployment?

Here we have Krugman performing the miracle. First this demand:
Suppose that we were to give workers some bargaining power by raising minimum wages,
A sticky wage idea if there ever was one. Then a quick search and we find Krugman claiming::

So sticky wages are an important part of both old and new Keynesian analysis, not because wage cuts would help us, but simply to make sense of what we see.

Very strange indeed.

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