Now, the Nobel Economics Prize goes to NY Times columnist

Journalists normally are honored by something like a Pulitzer Prize, but today the Nobel Economics Prize went to New York Times columnist Paul Krugman.

A headline in the Israeli press pointed plausibly to one possible explanation, stating pointedly that: “Bush critic wins nobel economics prize”.

The Associated press reported from Stockholm that “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’.”

Economics prize committee member Tore Ellingsen said that “Krugman is not only a scientist but also an opinion maker”

The AP reported that 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. Commenting on the current global economic meltdown, Krugman said: ” ‘This is terrifying’, 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’ ”

AP said that “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’.”

The Nobel committee indicated that the prize was awarded to Krugman this year not for his NYTimes columns but rather for his analysis of how economies of scale can affect trade patterns and the location of economic activity, according to the AP report. “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 … 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 AP also said that economics prize committee member Tore Ellingsen added that “Krugman’s analyses tend to back free trade and his research gives no ‘support for protectionism’.”

The AP report can be read in full here

One thought on “Now, the Nobel Economics Prize goes to NY Times columnist”

  1. whoever falls off the sky, the earth will pick them up! Thats an old Arabic saying….

    It reminds me of Al Gore when he failed in political life to be later honoured for his efforts in Global warming…

    and this winner, he might who the Noble prize is made for or something else…

    Let your soul rest in Peace Mr. Noble.

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