Krugman wins economics Nobel Prize trade theories
U.S. economist Paul Krugman, who developed theories integrating the research fields of international trade and economic geography to explain why economies of scale help certain countries dominate international trade, was awarded the 2008 Nobel Prize for economics Monday.
A professor of economics and international affairs at Princeton University, Krugman is the author of 20 books and more than 200 papers as well as a regular columnist for the New York Times.
A well-known critic of President George W. Bush's White House, Krugman has argued that the current administration's drive for deregulation and fiscal policies were factors in setting off the current worldwide banking crisis.
In addition to the Nobel award, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, Krugman will also receive $1.4 million in prize money.
In awarding the 55-year-old native New Yorker, the Royal Swedish Academy of Sciences said 'Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in a long series, a concept generally known as economies of scale.
'Meanwhile, consumers demand a varied supply of goods. As a result, small-scale production for a local market is replaced by large-scale production for the world market, where firms with similar products compete with one another. This kind of trade enables specialization and large-scale production, which result in lower prices and a greater diversity of commodities,' the panel said.
Krugman received a PhD at the Massachusetts Institute of Technology and has also taught at MIT, Stanford, and Yale.