Must-Read: Paul Krugman: Thinking About Brexit, Fast and Slow

Must-Read: Let me, for one, say that I am surprised that it now appears likely that there will be no Brexit recession in Britain: I would not have thought that a 15% decline in the value of the pound would have been enough to offset the negative shock to domestic investment delivered by the Brexit vote:

I thought that it would have required emergency expansionary monetary policy measures the Bank of England was not willing to undertake…

Once again: the rules: (1) Paul Krugman is right. (2) If you think Paul is wrong, see (1)…

Paul Krugman: Thinking About Brexit, Fast and Slow:

“The City’s smartest people are being forced to admit they were wrong about a ‘Brecession’”…

So says Business Insider, now that good UK PMI surveys have caused Credit Suisse and Morgan Stanley to back off their forecasts of a Brexit-induced recession.

But I wasn’t wrong. Yay me!

OK, seriously, at least for the moment it seems as if my skepticism about dire short-run forecasts, despite my agreement about the long run costs has been vindicated:

Economists have very good reasons to believe that Brexit will do bad things in the long run, but are strongly tempted to sex up their arguments by making very dubious claims about the short run. And the fact that so many respectable people are making these dubious claims makes them seem well-reasoned when they aren’t.

I could, of course, still turn out to be wrong. But let me say that what I’m really enjoying here — aside from the chance to claim that I was right — is, for once, having an argument with smart people who are trying to get it right. So much of my time these days is spent combatting sheer derp, that it’s almost like a vacation to debate propositions that aren’t self-evidently stupid.