New York Times op-ed columnist Paul Krugman, usually an astute observer, must have been having an off day when he made a completely incorrect assessment in his column on gentrification in New York City.
As the saying goes, even Homer nods. Paul Krugman must have been having an off day at the end of November 2015, when he devoted his op-ed column in The New York Times to gentrification in New York City. After describing the trend, and appropriately decrying the number of people being priced out of America’s urban revival, he comes to his point. Applying classical economic theory, he put it, “rising demand for urban living by the elite could be met largely by increasing supply.” He goes on to write that by increasing the supply of housing, New York could “thereby ensure that the inward migration of the elite doesn’t drive out everyone else.” In theory, it makes sense. If you create enough additional supply to comfortably meet the demand, you reduce the price pressure on the entire system. Prices stabilize, nobody is displaced, everybody’s happy. If only.
FULL STORY: Even Homer Nods: Paul Krugman Gets It Wrong on Housing

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