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.â€
“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.â€
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.
Norlanderon October 13 2008 12:35:35
Krugman has been one of my favorite economists for a long time. I've read his bi-weekly columns for several years, and even dipped into his academic work for a master thesis of mine. He has for a long time warned about the upcoming crisis, and explained economic theory to people in a way that made you understand and want to know more. The fact that Economic Geography gets a nod is just icing on the cake. Congrats Mr. Krugman.
Norlanderon October 14 2008 14:00:51
Krugman has been labeled the new Galbraith by some economists (blurb on the back of his book "conscience of a liberal", which makes me think of this Galbraith quote...
The only function of economic forecasting is to make astrology look respectable.
- John Kenneth Galbraith
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