Monday, October 13, 2008

Paul Krugman Wins Nobel Prize in Economics

The Royal Swedish Academy of Sciences cited Krugman "for his analysis of trade patterns and location of economic activity."

Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

He is the author or editor of 20 books.

He is one of the founders of the "new trade theory". Supposed "New" Trade theorists challenge the assumption of diminishing returns to scale, and some argue that using protectionist measures to build up a huge industrial base in certain industries will then allow those sectors to dominate the world market. In 1996 Krugman wrote that International economics a generation earlier had completely ignored returns to scale "The idea that trade might reflect an overlay of increasing-returns specialization on comparative advantage was not there at all: instead, the ruling idea was that increasing returns would simply alter the pattern of comparative advantage."

In recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to "that economist under forty who is adjudged to have made a significant contribution to economic knowledge." Krugman's current academic research is focused on economic and currency crises.

Krugman has written extensively for a broader public audience. Some of his recent articles on economic issues have appeared in Foreign Affairs, Harvard Business Review, Scientific American and other journals.

Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University.

He also falls into the curiously large category of economists that don't understand business cycle theory.

The Nobel Prize Committee release on his award.

NYT on Krugman (including his first reaction) is here

David Gordon on Krugman's New Trade Theory, during a review of Krugman's Pop Internationalism, is here.

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