Re: OT: Columnist Paul Krugman wins Nobel economics prize / Fears McCain

On Oct 13, 8:01 am, Flash Gordon <BorgNew...@xxxxxxxxx> wrote:
http://biz.yahoo.com/ap/081013/eu_sweden_nobel_economics.html

AP
Columnist Paul Krugman wins Nobel economics prize
Monday October 13, 9:14 am ET
By Karl Ritter and Matt Moore, Associated Press Writers
Princeton professor and New York Times columnist Paul Krugman wins
Nobel economics prize

STOCKHOLM, Sweden (AP) -- Paul Krugman, the Princeton University
scholar and New York Times columnist, won the Nobel prize in economics
Monday for his analysis of how economies of scale can affect trade
patterns and the location of economic activity.

Krugman has been a harsh critic of the Bush administration and the
Republican Party in The New York Times, where he writes a regular
column and has a blog called "Conscience of a Liberal."

He has come out forcefully against John McCain during the economic
meltdown, saying the Republican candidate is "more frightening now
than he was a few weeks ago" and earlier that the GOP has become "the
party of stupid."

"Krugman is not only a scientist but also an opinion maker," economics
prize committee member Tore Ellingsen said. He added that Krugman's
analyses tend to back free trade and his research gives no "support
for protectionism."

The 55-year-old American economist was the lone winner of the 10
million kronor ($1.4 million) award and the latest in a string of
American researchers to be honored. It was only the second time since
2000 that a single laureate won the prize, which is typically shared
by two or three researchers.

The Royal Swedish Academy of Sciences praised Krugman for formulating
a new theory to answer questions about free trade and said his theory
has inspired an enormous field of research.

"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.

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 Alfred Nobel's memory.

Besides his work as an economist at Princeton University in New
Jersey, where he has been since 2000, Krugman has written for
publications including Foreign Affairs, the Harvard Business Review
and Scientific American.

Commenting on the global economic meltdown, Krugman 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. "I had never thought that in my
lifetime I would see anything that resembles the Great Depression, but
this in fact does."

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."

Showing a sense of humor, Krugman's New York Times blog had an entry
early Monday that read "A funny thing happened to me this morning...."
with a link to the Nobel announcement.

Krugman graduated with a bachelor's degree from Yale in 1974 and
received a Ph.D. from MIT in 1977. Besides teaching at Yale and MIT,
he also taught at Stanford.

Krugman's work on new trade theory also garnered him the John Bates
Clark medal from the American Economic Association in 1991. That prize
is given every two years to an economist under the age of 40.

The Nobel 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.

In contrast to his treatment of U.S. financial officials, Krugman has
praised leaders in Britain for their response to the global financial
crisis.

In an Oct. 13 column in the New York Times, Krugman wrote that British
Prime Minister Gordon Brown and Chancellor Alistair Darling "defined
the character of the worldwide rescue effort, with other wealthy
nations playing catch-up."

Whereas U.S. Treasury Secretary Henry Paulson rejected a "sort of
temporary part-nationalization" involving governments giving financial
institutions more money in return for a share of ownership, the
British government "went straight to the heart of the problem ... with
stunning speed."

Krugman said the major European economies have "in effect declared
themselves ready to follow Britain's lead, injecting hundreds of
billions of dollars into banks while guaranteeing their debts."

"And whaddya know," Krugman continued, "Mr. Paulson -- after arguably
wasting several precious weeks -- has also reversed course, and now
plans to buy equity stakes rather than bad mortgage securities."

Krugman introduced his theory in 1979 in a 10-page article in the
Journal of International Economics.

It posited that because consumers want a diversity of products, and
because economies of scale make production cheaper, multiple countries
can build a product such as cars. A nation like Sweden can build its
own car brands for both export and sale at home, while also importing
cars from other countries.

The article also outlined a new theory of economic geography.
Krugman's idea was that if two countries were exactly alike, except
one had a larger population, real wages would be somewhat higher in
the more populous country because companies there could make better
use of economies of scale, creating a greater diversity of goods,
lower prices, or both.

Because this enhances the welfare of consumers in that country, its
population would increase as more people moved there, which would lead
to additional increases in real wages.

The Nobel Prizes in medicine, chemistry, physics, literature and
economics will be handed out in Stockholm by Sweden's King Carl XVI on
Dec. 10, the anniversary of prize founder Alfred Nobel's death in
1896. The Nobel Peace Prize is handed out in Oslo, Norway, on the same
date.

Wow. I was just going to post this and you beat me to it. The honor
is well deserved and long overdue.

I imagine Mo Ron Charles' head is exploding right about now. Mo Ron
imagines he knows more about economics than Professor Krugman. My cat
knows more about economics than Mo Ron Charles.


William Coleman (ramashiva)
.

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