Paul Krugman Wins Nobel Prize
New York Times columnist (and Princeton economist) Paul Krugman has won the Nobel Prize for Economics.
Princeton economist and New York Times columnist Paul Krugman won the Nobel economics prize on Monday for his analysis of how economies of scale can affect trade patterns and the location of economic activity. Krugman was the lone of winner of the 10 million kronor ($1.4 million) award and the latest in a string of American researchers to be honored.
The Royal Swedish Academy of Sciences praised Krugman for formulating a new theory to answer questions about free trade. “What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions,” the academy said in its citation. “He has thereby integrated the previously disparate research fields of international trade and economic geography,” it said.
Commenting on the global economic meltdown, he told a news conference in Stockholm by telephone from the United States that some of his research was linked to currency crises and related issues. “This is terrifying,” he said, comparing it to the financial crisis that gripped Asia in the 1990s.
He said winning the Nobel award won’t change his approach to research and writing. “The prize will enhance visibility,” he said, “but I hope it does not lead me into going to a lot of purely celebratory events, aside from the Nobel presentation itself.”
The citation said Krugman’s approach is based on the premise that many goods and services can be produced at less cost in long series, a concept known as economies of scale. His research showed the effects of that on trade patterns and on the location of economic activity.
While this may shock critics of his column, which is frequently less than brilliant, Krugman is held in enormously high esteem in the academy. He was the winner of the 1991 John Bates Clark Model, awarded to “that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge,” frequently a pre-sager of a Nobel.
Tyler Cowen has an excellent roundup of links and commentary of Krugman’s work. His conclusion:
This was definitely a “real world” pick and a nod in the direction of economists who are engaged in policy analysis and writing for the broader public. Krugman is a solo winner and solo winners are becoming increasingly rare. That is the real statement here, namely that Krugman deserves his own prize, all to himself. This could easily have been a joint prize, given to other trade figures as well, but in handing it out solo I believe the committee is a) stressing Krugman’s work in economic geography, and b) stressing the importance of relevance for economics.
A 2006 feature in Finance & Develpment predicted “Krugman may well become the first person outside the field of literature to win both the Nobel and Pulitzer Prizes, the acme of achievement in academics and journalism.” He’s halfway there now. (He has won the so-called “European Pulitzer,” the Prince of Asturias award.)
Update (Steve Verdon): I haven’t looked at the reactions to Krugman’s winning the Nobel, but I don’t think it is all that surprising. Krugman’s name has probably been on the list for at least the last 5 years if not longer. His work was indeed groundbreaking. I’m just hoping that with the upcoming the election, if Obama wins, some sembalance of sanity will return to Prof. Krugman’s writing. Prior to the Bush Presidency Krugman’s writings in Slate and elsewhere were actually quite good and often pointed out some of the more dopey positions some on the Left Held.