An obsessive fear of inflation wields too much influence in the economic arena, intimidating the Federal Reserve, says Nobel laureate economist Paul Krugman of Princeton University.

And he writes in The New York Times that it's conservatives who are obsessed.

"Much supposedly informed opinion has remained fixated on the supposed threat of rising prices despite being wrong again and again," Krugman argues.

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

"If you spent the last five years watching CNBC, or reading The Wall Street Journal opinion pages, or for that matter listening to prominent conservative economists, you lived in a constant state of alarm over runaway inflation, which was coming any day now. It never did."

The obsessiveness is fundamentally political, he notes. "Most conservatives are inflation obsessives, and nearly all inflation obsessives are conservative."

The reason for that is that conservatives want the government to stay out of the economy, even if intervention would lessen citizens' pain, because they believe "the private sector always knows best," Krugman maintains.

"Obsessives failed to distinguish between underlying inflation and short-term fluctuations in the headline number, which are mainly driven by volatile energy and food prices. . . . They also failed to understand that printing money in a depressed economy isn't inflationary," he adds.

"The clamor from inflation obsessives has intimidated the Fed, which might otherwise have done more," he writes. "And it has also been part of a general climate of opposition to anything that might address our continuing jobs crisis."

Consumer prices rose only 1.6 percent in the 12 months through January, giving the Fed room to maintain its stimulative stance, some economists say.

"There is very little pricing power for businesses," Julia Coronado, chief economist for North America at BNP Paribas, tells Bloomberg. "There doesn’t seem to be any need to tighten policy any time soon."

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

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