Nobel economist Paul Krugman says doomsday economic predictions were wrong, and the Fed risks a recession if it tries to respond to 'imaginary' stagflation

• Predictions of a steep recession and runaway inflation are wrong, Paul Krugman said in an op-ed.
• The top economist said inflation is falling more rapidly than the Fed thinks.
• The Fed, however, still risks causing a recession if it tries to respond to "imaginary" stagflation. 

Grim predictions of a steep recession and runaway inflation are wrong, and the Fed risks sparking a recession if it tries to respond to a stagflation scenario where none exists, according to Nobel economist Paul Krugman.