Krugman: an AI bubble burst would push the US into a liquidity trap
GaryMarcus · x · 2026-10-26
Gary Marcus quotes Paul Krugman's macro warning: an AI bubble bursting would be a far bigger economic shock than the 1990s IT bubble, yet the Fed has far less room to cut — the funds rate is only 4%. If massive AI spending is a bubble, the US risks falling into a liquidity trap with a depressed economy for years.
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