paul krugman: Hayek is RIGHT

Look who’s a Hayekian macroeconomist now.  Paul Krugman spent most of a decade advocating a Fed created artificial boom.  Now Krugman is explicitly acknowledging that such actions created systematic malinvestments in the capital structure of production.  Here’s Krugman:

Financial firms, we now know, directed vast quantities of capital into the construction of unsellable houses and empty shopping malls.

What Krugman is testifying to here is nothing less than the bedrock of Hayekian macro as outlined in Hayek’s original 1929 book Monetary Theory and the Trade Cycle.  You can’t be more Hayekian than Krugman is right here.

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