[Infowarrior] - Congratulations to Paul Krugman

[Richard Forno]

October 13, 2008, 7:50 am
Paul Krugman Wins Economics Nobel
By Catherine Rampell

http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?hp

Paul Krugman, a professor at Princeton University and an Op-Ed  
columnist for The New York Times, was awarded the Nobel Memorial Prize  
in Economic Sciences on Monday.

“It’s been an extremely weird day, but weird in a positive way,” Mr.  
Krugman said in an interview on his way to a Washington meeting for  
the Group of Thirty, an international body from the public and private  
sectors that discusses international economics. He said he was mostly  
“preoccupied with the hassles” of trying to make all his scheduled  
meetings today and answer a constantly-ringing cell phone.

Mr. Krugman received the award for his work on international trade and  
economic geography. In particular, the prize committee lauded his work  
for “having shown the effects of economies of scale on trade patterns  
and on the location of economic activity.” He has developed models  
that explain observed patterns of trade between countries, as well as  
what goods are produced where and why. Traditional trade theory  
assumes that countries are different and will exchange different kinds  
of goods with each other; Mr. Krugman’s theories have explained why  
worldwide trade is dominated by a few countries that are similar to  
each other, and why some countries might import the same kinds of  
goods that it exports.

“There was something very beautiful about the old existing trade  
theory, and its ability to capture the world in a surprisingly simple  
conceptual framework,” Mr. Krugman said. “And then I realized that  
some of the new insights coming through in industrial organization  
could be applied to international trade.”

Mr. Krugman wrote his dissertation, however, on international finance,  
and credits his late MIT professor Rudiger Dornbusch for pushing him  
to study international trade.

“I went to visit him one snowy day in early 1978 and described to him  
what I’d been thinking about,” Mr. Krugman said. “He turned to me and  
said, ‘You’ve got to write about that.’”

Mr. Krugman has been an Op-Ed columnist at the New York Times since  
1999. A collection of his recent columns can be found here.

“For economists, this is a validation but not news. We know what each  
other have been up to,” Mr. Krugman said. “For readers of the column,  
maybe they will read a little more carefully when I’m being  
economistic, or maybe have a little more tolerance when I’m being  
boring.”

He said that he does not expect his critics to let him off any easier  
because of his new accolade, though.

“I think we’ve learned this when we see Joe Stiglitz writing,” Mr.  
Krugman said, referring to the winner of the economics Nobel in 2001.  
“I haven’t noticed him getting an easy time. People just say, ‘Sure,  
he’s a great Nobel laureate and he’s very smart, but he still doesn’t  
know what he’s talking about in this situation.’ I’m sure I’ll get the  
same thing.”

In 1991 Mr. Krugman received the 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.”

Mr. Krugman follows a number of Clark medal recipients who have gone  
on to win a Nobel, including Mr. Stiglitz.

“To be absolutely, totally honest I thought this day might come  
someday, but I was absolutely convinced it wasn’t going to be this  
day,” Mr. Krugman said. “I know people who live their lives waiting  
for this call, and it’s not good for the soul. So I put it out of my  
mind and stopped thinking about it.”

He said he didn’t actually know which day the winner’s name would be  
released until a colleague told him last week.

Mr. Krugman continues to teach at Princeton. This semester Mr. Krugman  
is teaching a small graduate-level course on international monetary  
policy and theory, covering such timely subjects as international  
liquidity crises. In recent years he has also taught courses on the  
welfare state and international trade, as well as all-freshman  
seminars on various economic topics.

Monday’s award is the last of the six prizes and is not one of the  
original Nobels, but was created in 1968 by the Swedish central bank  
in Alfred Nobel’s memory. Mr. Krugman was the only winner of the  
award, which includes a prize of about $1.4 million.