Paul Krugman: That Yield Spread Doesn't Mean What You Think It Means

A year and a half ago Paul Krugman warned about how to interpret an upward-sloping yield curve:

The yield curve: I’m a little late getting to this, but via Mark Thoma I see that economists at the Cleveland Fed are taking some comfort from the positive slope of the yield curve. Long-term interest rates are higher than short-term rates, which is usually a sign that the economy will expand. Not this time, I’m afraid. It’s all about the zero lower bound.

The reason for the historical...