Monday, October 13, 2008

Paul Krugman wins the Nobel Prize!

Paul Krugman wins the 2008 Nobel Prize in Economics "for his analysis of trade patterns and location of economic activity"
First I got to know from Freakonomics See more here

"Paul Krugman, a professor of economics and international affairs at Princeton since 2000, has won the 2008 Nobel Prize in economics.Krugman, the only winner this year, was recognized "for his analysis of trade patterns and location of economic activity."In addition to teaching and conducting research at Princeton, Krugman writes a column for The New York Times."It's deeply gratifying," said Krugman early this morning. "There is so much shock involved that I can't really sort out. I think it will take a few days before I can assess it."Princeton President Shirley M. Tilghman said, "Paul Krugman has had a significant impact on both economics and public policy, and we are delighted by this recognition of his work." Anne-Marie Slaughter, dean of the Woodrow WIlson School of Public and International Affairs, added, "Paul Krugman has been at the cutting edge of research on the most important phenomenon of our time: policymaking in the face of rapid and seemingly inexorable globalization. At the same time, he is one of our most visible faculty members in the public sphere, actively engaging critical public policy debates. We congratulate him heartily, honoring him as the school's second Nobel laureate in economics in only six years."Daniel Kahneman, a professor of psychology and public affairs, was awarded the Nobel Prize in economics in 2002.More information, including the time and location of a press conference and reception for Krugman, will be posted as it becomes available".

There is also a range of comments to winning prize

Princeton University's Paul Krugman Wins Nobel Economics Prize
By Simon Kennedy and Rich Miller

Oct. 13 (Bloomberg) -- Princeton University Professor Paul Krugman, known as much for his criticism of George W. Bush's policies as for his academic work, won the Nobel Prize in economics for his theories on world trade.
Krugman, 55, was honored ``for his analysis of trade patterns and location of economic activity,'' said the Royal Swedish Academy of Sciences, which selects the winners. His work showed how economies of scale influence trade and urbanization.
While Krugman found broader fame with his newspaper columns attacking Bush, he gained his reputation in economics by arguing countries could gain a competitive advantage through subsidies to key industries. His research helped explain how the development of large-scale production for the world market has attracted more people to cities and led to higher wages.
``This award is clearly for Paul Krugman the economist, not for Paul Krugman the journalist or political critic,'' said Robert Solow, a 1987 Nobel laureate who once taught Krugman. ``What's remarkable about Paul is he manages to do everything. He's a contributor to fundamental economic theory and a top- ranked journalist.''
In a brief telephone interview after the award was announced, Krugman said ``it's a total surprise.''
The Princeton economist's academic work analyzed how world trade came to be dominated by countries that both import and export similar products -- automobiles, for example.
``This kind of trade enables specialization and large-scale production, which result in lower prices and a greater diversity of commodities,'' the Royal Academy said in a statement today.
Solow said globalization shows the value of Krugman's work.
``As multinational corporations become more prominent, it's important to have a way of thinking about trade that gives them adequate attention,'' he said. ``As industry and modern economic activity spreads around the world, the question of what goes where and whether the world can get locked into production that is not the most efficient is going to become extremely important.''
A self-proclaimed liberal, Krugman has regularly taken Bush to task in his columns for the New York Times, slamming the president personally for everything from the war in Iraq to his big tax cuts.
``Mr. Bush has degraded our government and undermined the rule of law,'' Krugman wrote in a column on May 18, 2007. ``He has led us into strategic disaster and moral squalor.''
Depression Parallels
In an interview with Bloomberg Television on Oct. 10, Krugman said the current financial turmoil had similarities with the Great Depression. ``The parallels are stronger than I thought they would be,'' he said. ``We developed a financial system that is out of control. The only things people want to buy are Treasury bills and water.''
Krugman was warning in 2005 about the dangers posed to the U.S. economy by its then-ballooning house prices and trade deficit.
``These days Americans make a living by selling each other houses, paid for with money borrowed from China,'' he wrote in a column on Aug. 29, 2005. ``One way or other, the economy will eventually eliminate both imbalances.''
Krugman's public commentary on the economy and politics has earned him criticism from conservatives such as Donald Luskin, chief investment officer for Trend Macrolytics, an investment consulting firm in Menlo Park, California.
`Public Intellectual'
``Paul Krugman the economist died a long time ago; the man named Paul Krugman is a public intellectual,'' Luskin, a contributing editor for National Review Online, said in an interview. ``He is not in the same category as John Maynard Keynes, he is in the same category as Oprah Winfrey. To give it to him is to dishonor the Nobel Prize.''
Krugman ``made quite a few enemies, especially when his columns in the New York Times started to go beyond economic issues and into political territory,'' said Dani Rodrik, a Harvard University economist, who welcomed Krugman's selection. ``His disdain for Bush and the Republicans did not exactly endear him to the substantial minority of professional economists who are Republican.''
Columbia University economist Edmund Phelps, a 2006 Nobel laureate, said he has ``no reason to think'' that anything other than Krugman's academic work influenced his choice by the Royal Academy's Economics Prize Committee.
``I doubt the committee is an avid reader of the New York Times,'' he said.
Phelps said Krugman's award marked a break after three years in which the prize rewarded work focused on uncertainty in economics rather than more classical studies of forces such as trade.
``Trade theory had not had much in the way of a creative advance for a century so the scarcity value of Paul's work was very high,'' Phelps said.
Krugman said today he saw little danger of a move toward protectionism in the U.S., no matter which party wins in next month's elections.
``There may be a standstill, or slowdown at least, on new trade agreements, but I find reversal on trade agreements implausible,'' he said in remarks via telephone to a group of reporters in Stockholm. ``Full-scale protectionism I don't see.''
In 1991, Krugman was awarded the John Bates Clark Medal by the American Economic Association, which gives the prize to the best economist under the age of 40.
Doctorate From MIT
Krugman was born in Long Island and studied economics at Yale University. He obtained a Ph.D. from the Massachusetts Institute of Technology in 1977 before joining Princeton University. From 1982 to 1983 he served on the White House Council of Economic Advisers, during the presidency of Ronald Reagan.
Alfred Nobel, the Swede who invented dynamite, in his will in 1896 established awards for achievements in physics, chemistry, medicine, peace and literature. The economics prize was set up by Sweden's central bank in 1968. The prize consists of 10 million Swedish kronor ($1.41 million), a gold medal and a diploma.
To contact the reporters on this story: Simon Kennedy in Washington at skennedy4@bloomberg.netRich Miller in Washington at;

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