Monday, 13 October 2008

Paul Krugman wins Nobel Prize for economics (AP)

6 hours ago
STOCKHOLM, Sweden (AP) — American Paul Krugman won the Nobel economics prize on Monday for his analysis of trade patterns and location of economic activity.
Krugman, born in 1953, and a professor at Princeton University in New Jersey and a columnist for The New York Times, formulated a new theory to answer questions about free trade, the Royal Swedish Academy of Sciences said.
"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.
Krugman was the lone of winner of the 10 million kronor (US$1.4 million) award, the latest in a string of American researchers to be honored.
The award, known as the Nobel Memorial Prize in Economic Sciences, is the last of the six Nobel prizes announced this year and is not one of the original Nobels. It was created in 1968 by the Swedish central bank in Nobel's memory.

October 14, 2008, NYTimes
Krugman Wins Economics Nobel

Paul Krugman, a professor at Princeton University and an Op-Ed page 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 30, 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 on Monday and answer a constantly ringing cellphone.
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; 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 professor at M.I.T., Rudiger Dornbusch, with 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.
“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 did not expect his critics to let him off any more easily 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 40 who is adjudged to have made a significant contribution to economic knowledge.” He follows several 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 did not participate in any of the economics Nobel betting pools , and that he did not 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 he 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, the last of the six prizes, is not one of the original Nobels. It was created in 1968 by the Swedish central bank in Alfred Nobel’s memory. Mr. Krugman was the sole winner of the award this year, which includes a prize of about $1.4 million.


International Herald Tribune
New York Times

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