Scholar/writer Paul Krugman calls his Nobel Prize “an incredible honor.”
Photo by Brian Wilson, courtesy the Princeton University Office of Communications
October 21, 2008
For the second year in a row, the Nobel Prize in economics has been bestowed upon a Princeton-based Jewish economist.
Paul Krugman, professor of economics and international affairs at Princeton University’s Woodrow Wilson School of Public and International Affairs, has been named the sole winner of the 2008 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The award, which carries with it a prize of some $1.4 million, was announced on Oct. 13.
Last year, Eric Maskin shared in the same honor. Maskin is an expert in mechanism design theory who serves as the Albert O. Hirschman Professor in the School of Social Science at the Institute for Advanced Study in Princeton.
The 55-year-old Krugman is an op-ed columnist for The New York Times and author of the standard textbook in international economics, International Economics: Theory and Policy. The Nobel Committee recognized him for his seminal work in international trade theory and economic geography, lauding Krugman for “having shown the effects of economies of scale on trade patterns and on the location of economic activity.”
“Patterns of trade and location have always been key issues in the economic debate,” the committee’s citation stated. “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. He has thereby integrated the previously disparate research fields of international trade and economic geography.”
Appearing at a press conference at the Woodrow Wilson School on the afternoon of Oct. 13, Krugman called the recognition “an incredible honor.”
“It’s stunning,” he said. “It hasn’t quite settled in.… One Nobel Prize can discombobulate your whole day.”
Krugman thanked the Nobel Committee for recognizing the field of international trade through its decision.
“I feel in some sense that I should be sharing this with all the others who made it possible,” he said. “It really is a collegial effort.”
Inherent advantages
Asked to encapsulate the groundbreaking theories for which he won the prize, Krugman noted that a previous theory about international trade said that countries trade with each other in order to take advantage of their differences. In his analysis, however, countries trade with each other in order to benefit from the inherent advantages of specialization.
As for his theory of economic geography, he said, it poses the idea that the reason things are where they are is because other things are where they are.
“Why are there 60 million people crowded into a fairly narrow strip of coastline here?” Krugman asked. “What is it about the East Coast of the United States that makes 60 million people want to live in this dense metropolitan strip?
“The answer is, it is not something about the coastline,” he said. “Each of those 60 million people wants to be there because the other 60 million people are there. That’s the essential part of the economic geography.”
Krugman has been among the Bush administration’s toughest critics in the Times, excoriating its economic and foreign policies in particular. He was one of the first economists to anticipate the bursting of the U.S. housing bubble and the resulting reverberation on international markets.
Krugman drew criticism from many Jewish groups in 2003 when he appeared to downplay the Malaysian prime minister’s remarks that “Jews rule the world as proxy.” He wrote that the leader’s remarks were “inexcusable” and “calculating,” but that “his strident rhetoric was actually part of a delicate balancing act aimed at domestic politics.”
The Anti-Defamation League charged that Krugman “underestimates the significance of the anti-Semitic diatribe.”
Krugman later responded by writing that most of his grandfather’s relatives died in Treblinka, and that trying to understand the roots of Muslim anti-Semitism is not the same as condoning it.
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