Surely you’re joking Mister Krugman
For the sake of full disclosure, I’ll publish here my notes from a talk that Prof. (and most recent Nobel Laureate) Paul Krugman gave at KSU in March of 2007.
Title “Will there be a dollar crisis?”
He puts the odds of a sharp dollar plunge at 4-to-1.
He expects people will soon have a “Willie Coyote moment”.
Stein’s law: “If something can’t go on for ever, then it will stop”.
This was then put into mathematical language with a differential equation and a few graphs.
However, PK also talked about the possibility of a statistical illusion, dark matter hypothesis: maybe it’s not so bad, maybe it’s actually much worse, etc…. Nobody knows. But he sticks to the 4:1 prediction.
Also if plunge happens it won’t be as bad as in Argentina: pain level at 50%. It would be worse for Japanese and the Chinese.
I got the impression that he was struggling to get a sharp catastrophic event out of a smooth mathematical model where things must just flow to equilibrium.
In any case, the whole thing was quite pleasant and entertaining. A lot of “mysteries” and “unexplained data” which doesn’t fit the theory, unheard-of, etc…Only one thing is sure: we’re doomed.