Paul Krugman Responds To Questions From The Financial Times

Martin Wolf interviews Paul Krugman, who he describes as one of the most respected, and most hated, US economists. Krugman responds by explaining that if he were not hated, he would feel that he had not been effective in delivering his messages. In addition to explaining how he has become hardened to criticism, he provides his views on US monetary policy, and the crisis in the eurozone.  He concludes the interview with a rejection of macroeconomic theory, and praise for some of the empirical work that some younger economists are doing in the US. Some of the research that he praises  is provided following the interview.  Rational expectation theory, and real business cycle theory, which fail to explain what really happens in economies, will eventually be replaced by the work of younger economists who are less interested in abstracting away reality in order to build models with little relevance to the real world.