Monday, October 13, 2008

Krugman Wins the Economics Nobel

It was announced today that Paul Krugman, Princeton professor and a New York Times op ed columnist won the 2008 Economics Nobel Prize for his work on international trade. Harvard economist Edward Glaeser explains in this piece why Krugman was honored. As an undergraduate Economics major who was headed to a PhD program before getting diverted to investment banking years ago, I have followed Krugman's career admiringly for at least 15 years. In my "International Economics" class with Professor Noel Farley at Bryn Mawr we used Krugman/Obstfeld which is the standard textbook on the subject.

Krugman is that rare combination of an economist who not only writes well for a popular audience but is highly respected by his peers as a first rate intellect who has made tremendous contributions to the understanding of international trade. As a columnist he is a prolific, reliably liberal and relentless critic of the follies of the Bush administration and its ideological acolytes. As an economist, Krugman is a true empiricist Keynesian, fastidious about facts and evidence and fiercely independent in his judgment. Krugman got his PhD from MIT under Rudi Dornbusch's guidance and that department has produced some of the best non-ideological economists of the last half century (From that group, Larry Summers now rises further up in the list to be honored next). To some degree the awarding of the prize to Krugman this year reflects a tacit recognition by the Nobel committee that market fundamentalism has run its course. This may signal the end of the era of the Chicago school's intellectual ascendancy. The recent spectacular financial market failures indicate the extent to which governments are needed to regulate and stabilize markets. During the current financial crisis Krugman's commentary on his blog "Conscience of a Liberal" has consistently been the "go to" opinion to understand the causes of the crisis and to look for sensible policy prescriptions to stem the rot.

Here are a few interesting Krugman-related links: BBC news announcement of his Nobel here; a comprehensive archive of writings by Krugman here; two of my own prior blog entries that reference Krugman here and here and his Wikipedia entry here.

1 comment:

Anonymous said...

Nicely pointed out. Krugman's strength also is to make economic concepts easily understood for laymen like myself.