Four cheers for Paul Krugman

Three of them for having won (highly deservedly) the Nobel prize and one for having been a beacon of light and guidance during the latest crisis.  Many would have thought that his increasingly public role--and contempt for everything Republican--in recent years had diminished his chances, but the committee made the right choice.  Paul's contributions to international economics are legion.  His ability to cut to the heart of the matter with just a couple of equations is unparalleled in the profession. 

Some years ago I was at a Festschrift conference for Jagdish Bhagwati at Columbia--Paul's teacher at MIT and himself a frequently mentioned name in connection with the Nobel prize.  One of the speakers was Paul Samuelson.  Now the usual drill on such occasions is to toast the man of the moment with a combination of wit and eloquence.  I don't recall if Samuelson even mentioned Bhagwati.  What I recall is that Samuelson spent his whole time on a detailed exegesis of Paul's work on trade. I should have known then that if the Nobel committee were to give another prize in international trade, it would go to Krugman.  

Comments

[William]

Indeed, four cheers for Krugman! A very savvy choice given his role and prescience in the current crisis, as well. Kudos to the jury of the Nobel Foundation on making an excellent -- and appropriately political -- choice.

PS. The spell check still hasn't been updated to include his name in the dictionary, though... The red underlining under his name is still there!

[IdahoSpud]

It's possible that Krugman's contempt for everything Republican improved his chances. It's not like Sweden is a hotbed of conservative thinking ;)

[Yakubu Kasavubu]

Giving the Nobel to Krugman at this time is like honoring the research assistant and ignoring the professor.

If I were Dixit (or even Bhagwati), I would be screaming into my pillow.

I guess it could have been worse: like giving it to Anne Krueger just for "gender balance".

[Barkley Rosser]

Dixit certainly would have the right as this reminds me of Lucas getting it for applying ratex to macro while John Muth who invented ratex never got it.

Krugman is deserving, but it was for applying Dixit-Stiglitz to both trade and regional, as did the last trade recipient, Sweden's own, Bertil Ohlin in 1977. After all, he was beaten to the punch in applying D-S in both areas by others. It is the combination that got it for him, plus, I suspect that Dani is right that his current excellent commentaries on the crisis have helped.

[Ashish Shivam]

Though i would be unnecessary to compare bhagwati or Dixit with Krugman but they should have got it before him.

[Per Kurowski]

From what I have read the Nobel Prize was awarded to Paul Krugman because:

“Combining economies of scale with lower transportation costs, according to Krugman's research, helps to explain why larger shares of the world's population live in cities and why economic activity is concentrated in metropolitan areas. He also has proven that migration to cities is increasing as large-scale production expands, wages rise and a wider array of goods become available.”

I do not want to be a party booper and I am sure that Paul Krugman deserves his price but I have to say though that the above does not really sound as Rocket Science to me. There has to be much more to it!

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[wjd123]

This is how I view Krugman and his winning the Nobel Prize in Economics. It's a bit convoluted, but it's coming from a non-economist who doesn't care about the Nobel Prize.

First, I'm a little peeved because I think Krugman got me censored. I should say Krugman's winning of the Nobel Prize got me censored. The night before he won it was the same night that the EU finally decided to coordinate its efforts over the banking crisis. Mark Thoma had put up a post on his blog "Krugman seems pleased." Well I was pleased also because I want the EU to succeed and I was happy its members were cooperating. I also knew that Krugman had been calling for such a move; so I wrote in my happiness--ignorant of the fact that Krugman had even been nominated for the Nobel Prize--"Hurrah for the EU, Hurray for Paul Krugman."

I didn't want that moment in history to go by without my registering my approval. I was also happy for Krugman because he was the point man asking the EU to shape up.

I have the feeling that Mark Thoma may have thought I was privy to something I wasn't, and I was doing economists a disservice by letting the cat out to the bag prematurely. Obviously I wasn't.

The next day when I went to see if anyone else shared my enthusiasm, "Krugman seems pleased" was gone and so was my expression of happiness. I felt cheated. My enthusiasm had been stolen. Maybe that seems petty or preposterous, but this is my view of Krugman winning the Nobel Prize.

It wasn't until the next morning when I was watching CNBC's finance show that I learned that Krugman has won the prize. I has no idea why he had won it but I was happy for him because of his relentless criticism of Republican policy. My happiness was matched by the unhappiness of the CNBC financial pundits. Upon reporting the news about Krugman, they immediately started raining on Paul's parade. According to them economics isn't a real science, and the Nobel Prize in Economics isn't that prestigious because it was an after thought.

They started the rain even before they knew for what Krugman had won the prize. It was obvious that their objection to Krugman's winning had everything to do with his political views.

I was happy for Krugman for political reasons and they were unhappy for political reasons. However, my happiness for political Krugman was that he had been vindicated. There unhappiness for political Kurgman was that he had been vindicated.

They were the handmaids of the financial angels cast down from heaven, and even at the sight of these fallen angels the handmaids couldn't admit their folly.

If there is any justice in eternity, greedy financiers will populate the lowest levels of hell.

Economist who supported free trade, and Krugman's early writings did, will be in hell with them. I'm just not sure on what level to place them.

Krugman is fortunate. He was atoning for his economic sins by his political courage and his later economic writings.

As a non-economist and as someone who has just hear about the work for which Krugman won his prize, I have to say, I don't really see the great leap forward.

Geography has always been a part of comparative advantage, factoring in the mobility of labor and transportation cost doesn't seem all that earth shaking. Did his model, in it simplicity, have a way of factoring in the rising cost of oil due to greater demand? In my opinion models start becoming obsolete the minute they are made.

Dani, I'm happy to inform everyone, doesn't have to worry about perdition. He will be saved and will find his place in heaven. I hope he is not lonely. There won't be very many economist around to keep him company.

Dani told the truth about the economists' cabal to push for free trade and sort out the social problems later. We're suffering the consequences of their scheming.

The social disruption we have today isn't a result of unforeseen consequences but the blindness of economists. Now after 12 years of republican rule we are scrambling for a safety net lest we all meet our doom.

Why does Dani escape a place in the inferno? Because he wrote this about procedural fairness:

"But a redistribution that takes place because home firms are undercut by competitors who employ deplorable labor practices, use production methods that are harmful to the environment, or enjoy government support is procedurally different than one that takes place because an innovator has come up with a better product through hard work or ingenuity. Trade and technological progress can have very different implications for procedural fairness. This is a point that most people instinctively grasp, but economists often miss."

Yes, Dani may be lonely in heaven without any of his fellow economist, but heaven will have one saving grace, thanks to Paul Krugman, there won't be any Republicans around either.

That's my view of Krugman's winning of the Nobel Prize in Economics.

[Barkley Rosser]

I note that Avinash Dixit has issued a public statement on Krugman receiving the prize, praising his work in very appropriate terms. Dixit is clearly a class act.

[Cabral Murphy]

Congrats to Krugman! I guess when it comes to Prizes, the good old rule "of first movers being less successful than their followers" applies!

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