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Nobel Prize-winning Paul Krugman walked around New York City the other day and was able, with his own two eyes, to see that the recession is over!
Not really. But he did infer that anecdotes what he saw while walking around NYC means that the recession isn't as bad as the numbers indicate:
I’m not sure what to make of it, but casual observation suggests a stronger recovery than anything I see in published numbers. Lots of small-scale construction — home remodeling, tear-downs replacing old houses. Many new businesses and restaurants filling storefronts that were vacant a couple of months ago.
There’s the observation: walking around, things look better than I expected.
That's good for the people of New York and Princeton! Paul Krugman can see you guys are doing just fine! Of course, Krugman is not a resident of Detroit, Michigan, where the unemployment rate is over 17%, highest of any major metropolitan area in the nation. But the numbers don't matter to Paul Krugman; what matters is what those Nobel-Prize-winning eyes see in person.
He could be making a point that many have made: published numbers might lag slightly behind actual recovery. But if that's his point, Paul should make that argument rather than this hopelessly out-of-touch anecdote of "things aren't so bad!"
Then again, it could be, as John Cochrane said, that Paul just isn't interested numbers any more nowadays. No, to Paul Krugman, anecdotes are better than data.
Does Krugman really think we can make progress on his – and my – agenda for economic and financial research — understanding frictions, imperfect markets, complex human behavior, institutional rigidities – by reverting to a literary style of exposition, and abandoning the attempt to compare theories quantitatively against data?
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