Princeton professor and New York Times op-editorialist, Paul Krugman, just won the Nobel Prize in economics "for his analysis of trade patterns and location of economic activity." This award comes at a time when he has been weighing in on the debate as to how best to fix the financial crisis. And I found inspiring his suggestion that governments should inject capital into ailing banks -- an idea that has taken hold in the U.K. and may also prevail here.
Why did Krugman win the Nobel? His work bolstered a branch of economics called strategic trade theory which argues that countries can subsidize certain industries to gain global market share. Others have praised his work on the development of clusters of related industries and his equations that measure how economic shocks affect the current account, exchange rates and capital flows.
The official name of Krugman's prize is "The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel." He'll get $1.4 million, a gold medal and a diploma. I've agreed and disagreed with him but if his ideas about how to fix the financial crisis take hold, maybe he'll be able to find a safe bank in which to deposit his winnings.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
10-13-2008 @ 9:50AM
Deniel Meel said...
Almost immediately after the ceremony, Paul Krugman gave an Special interview on U.S. economy to FOX. watch here: http://tubedirect.net/index.php?q=Nobel-Prize-2008-ec
Highly recommended!
10-13-2008 @ 10:29AM
thinkaboutit said...
One of the few economists who can actually explain things for the layperson. He gets flack for being too liberal or 'socialist". But what have the no regulation free traders brought us?
Be sure to split your deposits among the banks Mr Krugman.
10-13-2008 @ 10:33AM
beachpaul said...
Praise to Paul Krugman! I got my degree in Liberal Arts. Ninety percent of business, like high school, like life, is getting along with people you can't stand. Mr. Krugman has always been a lighthouse in the sea of greed, a turtle in a field of rabbits. Money? You don't work for money, you work for results. Money is just a measurement of those results. He already knows that. The other ten percent? Learning how to count. He knows that, too.
10-13-2008 @ 10:44AM
Grey Beard said...
Krugman is a free trade shill who believes that free trade is good no matter what - because his wife's village in China is so much better off since they have been exporting goods and importing American jobs.
His opinion that the current debacle is the result of under regulation is due to the fact that he is blind to the corrosive effects of trade deficit dollars that have been parked in financial instuments because foreign banks have decided to sit on dollars to keep their own currencies low and American industires uncompetitive....
10-13-2008 @ 12:07PM
mbyasin said...
Who is Paul Krugman?? Really
I know his real identity. He is Nicholas Romonov, and I have pictures from 1918 to prove it.