Paul Krugman says he's feeling 'more positive than I expected to be' about the economy

As the economic devastation caused by the coronavirus pandemic continues, Paul Krugman says he's feeling "more positive than I expected to be" about the recovery.

The economist and New York Times writer spoke in an interview with Bloomberg about the state of the U.S. economy amid the coronavirus pandemic, cautioning that the crisis should not be looked at as "a garden-variety recession" instead of a "shutdown enforced by social distancing."

Asked how long the economic fallout might last, Krugman explained that looking at past recessions, "until now we've had two kinds: 1979-82-type slumps basically caused by tight money and the 2007-09 type caused by private-sector overreach. The first kind was followed by V-shaped 'morning in America' recoveries; the second by sluggish recoveries that took a long time to restore full employment."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Krugman argues that the current crisis is "more like 1979-82 than 2007-09," not being caused "by imbalances that will take years to correct," which suggests a "fast recovery" once the coronavirus is contained. He offers a few caveats, though, nothing that it's unclear how long the pandemic will last and that states reopening too soon could "extend the period of economic weakness."

Almost 40 million Americans have filed initial unemployment claims since the start of the coronavirus pandemic, and economists from Goldman Sachs in a report earlier this month forecasted that the unemployment rate will reach 25 percent with the pre-virus rate not returning for years. Krugman tells Bloomberg, though, that all in all, he doesn't "see the case for a multiyear depression."

This interview with Krugman comes after Jason Furman, former chair of the Council of Economic Advisers, predicted to Politico a "partial rebound" with "the best jobs and growth numbers ever" in the months before the November election. Read the full interview at Bloomberg.