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Paul Krugman

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Paul Krugman
Nationality United States
Academic career
FieldMacroeconomics
School or
tradition		Neo-Keynesian economics
ContributionsInternational Trade Theory, New Trade Theory

Paul Robin Krugman (Template:Pron-en; born February 28, 1953, is an American economist, columnist, author, intellectual, and the 2008 recipient of the Nobel Memorial Prize in Economic Sciences.[1] He is a professor of economics and international affairs at Princeton University, and has since 2000 written a twice-weekly column for The New York Times.

Krugman is well-known in academia for his work in trade theory. His best-known work provides a model in which firms and countries produce and trade because of economies of scale. He was a critic of the "New Economy" of the late 1990s. Krugman criticized the fixed exchange rates in East and Southeast Asia, and Thailand's economic policies before the 1997 East Asian financial crisis. Just before the 1998 Russian financial crisis, he criticized investors such as Long-Term Capital Management whose profits depended on the maintenance of fixed exchange rates. Krugman is generally considered a neo-Keynesian economist,[2] with his views outlined in his books such as Peddling Prosperity. Krugman's International Economics: Theory and Policy is a standard textbook on international economics that explains currency crises and New Trade Theory. In 1991, he was awarded the John Bates Clark Medal by the American Economic Association. According to the Research Papers in Economics project, he is among the 50 most influential economists in the world today.

Krugman is generally considered a political liberal or progressive. He is an ardent critic of the George W. Bush administration and its foreign and domestic policy. Unlike many economic pundits, he is regarded as an important scholarly contributor by his peers.[3][4] He has written over 200 scholarly papers and 20 books—both academic and non-academic.[5]

Biography

Krugman was born into a Jewish family and grew up on Long Island in New York. He is married to Robin Wells, a fellow professor at Princeton, his second wife. They have no children.[6][7]

Krugman says that his interest in economics began with Isaac Asimov's Foundation novels, in which the social scientists of the future use "psychohistory" to attempt to save civilization. As psychohistory does not presently exist, Krugman turned to economics, which he considered the next best thing.[8]

Economist career

He earned his B.S. in economics from Yale University in 1974 and his Ph.D. from MIT in 1977. From 1982 to 1983, he spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers. He has taught at Yale University, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining the faculty of Princeton University in 2000. He is a member of the Group of Thirty international economic body and the Council on Foreign Relations.

When Bill Clinton came into office in 1993, he considered Krugman for a leading post; Krugman was flown out for a meeting in Arkansas. Krugman's outspokenness was reported to be "the main reason the Clinton administration didn't offer him a job."[9] Krugman says he would not have been interested in such a job; he told Newsweek, "I'm temperamentally unsuited for that kind of role. You have to be very good at people skills, biting your tongue when people say silly things."[9]

In his New York Times blog, Krugman repeated that statement, saying that he was "temperamentally unsuited to politics".[10]

Krugman was awarded the Nobel Memorial Prize in Economic Sciences, the sole awardee for 2008. This award, created in 1968 by the Swedish central bank in Alfred Nobel’s memory, includes a prize of about $1.4 million and was awarded to Krugman for his work associated with New Trade Theory.[11][12] In the words of the prize committee, "By having integrated economies of scale into explicit general equilibrium models, Paul Krugman has deepened our understanding of the determinants of trade and the location of economic activity."[13]

Theories

In the early 1990s, he helped popularize the argument made by Laurence Lau and Alwyn Young, among others, that the growth of economies in East Asia was not the result of new and original economic models, but rather increased capital and labor inputs, which did not result in an increase in total factor productivity. His prediction was that future economic growth in East Asia would slow as it became more difficult to generate economic growth from increasing inputs.

In the 1990s, Krugman focused on what can be described as policy economics, which he attempted to explain to the general audience in such works as Peddling Prosperity and columns attacking what he described as "policy entrepreneurs" who were focused single-mindedly on particular solutions, which they proposed to solve every conceivable crisis. He was critical of industrial policy (an approach Clinton later dropped under the influence of Robert Rubin and Lawrence Summers) and argued in favor of free trade. (He writes on p. xxvi of his book The Great Unraveling that "I still have the angry letter Ralph Nader sent me when I criticized his attacks on globalization.")

Author and journalist

Krugman wrote first for Fortune and Slate, later for The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly. Krugman said that to answer what he called Pop Internationalism, "I would have to write essays for non-economists that were clear, effective, and entertaining."[14]

Since January 2000, Krugman has contributed a twice-weekly column to the Op-Ed page of the New York Times, which has made him, in the words of the Washington Monthly, "the most important political columnist in America... he is almost alone in analyzing the most important story in politics in recent years — the seamless melding of corporate, class, and political party interests at which the Bush administration excels."[15] In 2007, he began supplementing his Times column with a blog. In introducing it, he wrote, "Many of the posts will be supplements to my regular columns; I’ll be using this space to present the kind of information I can’t provide on the printed page – especially charts and tables, which are crucial to the way I think about most of the issues I write about."[16][17]

In September, 2003, Krugman published a collection of his columns under the title, The Great Unraveling. Taken as a whole, it was a scathing attack on the Bush's administration's economic and foreign policies. His main argument was that the large deficits generated by the Bush administration—generated by decreasing taxes, increasing public spending, and fighting a war in Iraq — were in the long run unsustainable, and would eventually generate a major economic crisis. The book was a best-seller.[18][19][20]

In 2007, Krugman published The Conscience of a Liberal. The book is a history of wealth and income gaps in the US in the 20th century. The book documents that the gap between rich and poor declined greatly in mid-century, then widened in the last two decades to levels higher than those in the 1920s. Most economists (including Krugman) have regarded the late-20th century divergence as resulting largely from changes in technology and trade, but Krugman writes that government policies had played a much greater role both in reducing the gap in the 1930s through 1970s and in widening it in the 1980s through the present. He rebuked the Bush administration for policies that currently widen the gap between the rich and poor. Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense.[21] The book was praised in outlets such as The New York Review of Books,[22] but it was attacked by such organizations as the classical liberal Ludwig von Mises Institute, where it was argued to be overly political and virtually without ideologically-sympathetic[clarification needed] economic content.[23]

In 2008, amid the subprime mortgage crisis in the US, Krugman predicted that housing prices would drop 25% overall and up to 50% in locations such as Miami or Los Angeles.[24]

Krugman has appeared several times a a guest on MSNBC, particularly since the onset of the economic crisis in September 2008. He has repeatedly expressed his view that Alan Greenspan and Phil Gramm are the two people most responsible for causing the crisis.[25]

Controversies

Working for Enron

Krugman was one of many economists to serve as a consultant for an advisory board for Enron; he did this in 1999, being paid $37,500[26] before New York Times rules required him to resign when he took a job as a columnist in 2000. He stated later the consulting was to offer, "Enron executives briefings on economic and political issues", and that it had required him to, "spend four days in Houston."[26]

However, when the story of Enron's corporate scandals broke, critics accused him of having a conflict of interest and the job of having been a bribe to control media coverage, charges he denies forcefully. He points out that in columns written before and after the scandal, he disclosed his past Enron relationship when he wrote about the company.[26][27] He was critical of the company: he was one of the first writers to argue that deregulation of the California energy market had led to market-manipulation by energy companies (in a column in the New York Times on December 10, 2000 called "California Screaming"); Enron was the largest in this market; he criticized it directly in August 17, 2001. He writes in The Great Unraveling (p. 26) that

I was no more perceptive than anyone else; during the bull market years [of the late 1990s] some people did send me letters claiming that major corporations were cooking their books, but - to my great regret - I ignored them. However, when Enron - the most celebrated company of its time, lauded as the very model of a modern business enterprise - blew up, I immediately saw the implications: if such a famous and celebrated company could have been a Ponzi scheme, it was very unlikely that the rest of U.S. business was squeaky clean. In fact, it quickly became clear, the bubble years were both the cause and effect of an epidemic of corporate malfeasance.

His first column on the epidemic was published in The New York Times on February 1, 2002 with the title, "Two, Three, Many?"

Criticism of his commentaries

Krugman's early and direct statements that the claims of the Bush Administration on the economy, the Iraq war and other issues were lies attracted criticism. The journalist James Fallows spoke of his "gratuitous spleen," and Clinton commerce secretary Jeffrey Garten complained that "He behaves like someone with a massive chip on his shoulder."[28]

A November 13, 2003 article in The Economist [29] reads: "A glance through his past columns reveals a growing tendency to attribute all the world's ills to George Bush…Even his economics is sometimes stretched…Overall, the effect is to give lay readers the illusion that Mr Krugman's perfectly respectable personal political beliefs can somehow be derived empirically from economic theory."

Krugman's critics have accused him of employing what they called a "shrill" rhetorical style.[15][30][31] Economist J. Bradford DeLong and other Krugman supporters responded by creating the website Shrillblog, noting that Krugman critics such as Andrew Sullivan ultimately came to agree with the substance of Krugman's criticisms, and to adopt a similarly "shrill" tone in their discussions of the Bush Administration.

GMU economist Daniel B. Klein published during 2008 a paper in Econ Journal Watch that reviews and criticizes Krugman's columns for the New York Times. Klein contends that Krugman's "social-democratic impetus sometimes trumps people's interests, notably poor people's interests... Krugman has almost never come out against extant government interventions, even ones that expert economists seem to agree are bad, and especially so for the poor." Klein's evidence is that Krugman has not spoken in favor of school vouchers, ending the minimum wage, or abolishing the FDA.[32]

In the 2008 Presidential campaign, Krugman came under criticism from supporters of Barack Obama, then a candidate for the Democratic presidential nomination, as a result of his stated preference for the policies of Hillary Clinton on health care and other issues.[33]

Awards

Bibliography

Books

Academic publications (authored or coauthored)

  • The Spatial Economy - Cities, Regions and International Trade (July 1999), with Masahisa Fujita and Anthony Venables. MIT Press, ISBN 0262062046
  • The Self Organizing Economy (February 1996), ISBN 1557866988
  • EMU and the Regions (December 1995), with Guillermo de la Dehesa. ISBN 1567080383
  • Development, Geography, and Economic Theory (Ohlin Lectures) (September 1995), ISBN 0262112035
  • Foreign Direct Investment in the United States (3rd Edition) (February 1995), with Edward M. Graham. ISBN 0881322040
  • World Savings Shortage (September 1994), ISBN 0881321613
  • What Do We Need to Know About the International Monetary System? (Essays in International Finance, No 190 July 1993) ISBN 0881650978
  • Currencies and Crises (June 1992), ISBN 0262111659
  • Geography and Trade (Gaston Eyskens Lecture Series) (August 1991), ISBN 0262111594
  • The Risks Facing the World Economy (July 1991), with Guillermo de la Dehesa and Charles Taylor. ISBN 1567080731
  • Has the Adjustment Process Worked? (Policy Analyses in International Economics, 34) (June 1991), ISBN 0881321168
  • Rethinking International Trade (April 1990), ISBN 0262111489
  • Trade Policy and Market Structure (March 1989), with Elhanan Helpman. ISBN 0262081822
  • Exchange-Rate Instability (Lionel Robbins Lectures) (November 1988), ISBN 0262111403
  • Adjustment in the World Economy (August 1987) ISBN 1567080235
  • Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1985), with Elhanan Helpman. ISBN 0262081504

Academic publications (edited or coedited)

  • Currency Crises (National Bureau of Economic Research Conference Report) (September 2000), ISBN 0226454622
  • Trade with Japan : Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1995), ISBN 0226454592
  • Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April, 1994), co-edited with Alasdair Smith. ISBN 0226454606
  • Exchange Rate Targets and Currency Bands (October 1991), co-edited with Marcus Miller. ISBN 0521415330
  • Strategic Trade Policy and the New International Economics (January 1986), ISBN 0262111128

Economics textbooks

  • Economics: European Edition (Spring 2007), with Robin Wells and Kathryn Graddy. ISBN 0716799561
  • Macroeconomics (February 2006), with Robin Wells. ISBN 0716767635
  • Economics (December 2005), with Robin Wells. ISBN 1572591501
  • Microeconomics (March 2004), with Robin Wells. ISBN 0716759977
  • International Economics: Theory and Policy, with Maurice Obstfeld. 7th Edition (2006), ISBN 0321293835; 1st Edition (1998), ISBN 0673521869

Books for a general audience

  • The Conscience of a Liberal (October 2007) ISBN 0393060691
  • The Great Unraveling: Losing Our Way in the New Century (September 2003) ISBN 0393058506
    • A book of his New York Times columns, many deal with the economic policies of the Bush administration or the economy in general
  • Fuzzy Math: The Essential Guide to the Bush Tax Plan (May 4, 2001) ISBN 0393050629
  • The Return of Depression Economics (May 1999) ISBN 039304839X
    • Considers the long economic stagnation of Japan through the 1990s, the Asian financial crisis, and problems in Latin America.
  • The Accidental Theorist and Other Dispatches from the Dismal Science (May 1998) ISBN 0393046389
    • A collection of Krugman's articles for various publications regarding the economy.
  • The Age of Diminished Expectations, Third Edition (August 1997) ISBN 0262112248
  • Pop Internationalism (March 1996) ISBN 0262112108
  • Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations (April 1995) ISBN 0393312925
    • History of economic thought from the first rumblings of revolt against Keynesian economics to the present, for the layman.

Articles

Selected academic articles

  • (1996) 'Are currency crises self-fulfilling?' NBER Macroeconomics Annual 11, pp. 345-78.
  • (1991) 'Increasing returns and economic geography'. Journal of Political Economy 99, pp. 483-99.
  • (1991) 'Target zones and exchange rate dynamics'. Quarterly Journal of Economics 106 (3), pp. 669-82.
  • (1991) 'History versus expectations'. Quarterly Journal of Economics 106 (2), pp. 651-67.
  • (1981) 'Intra-industry specialization and the gains from trade'. Journal of Political Economy 89, pp. 959-73.
  • (1980) 'Scale economies, product differentiation, and the pattern of trade'. American Economic Review 70, pp. 950-59.
  • (1979) 'A model of balance-of-payments crises'. Journal of Money, Credit, and Banking 11, pp. 311-25.
  • (1979) 'Increasing returns, monopolistic competition, and international trade'. Journal of International Economics 9, pp. 469-79.

Humor

References

  1. ^ Foreign Policy: Top 100 Public Intellectuals. May 2008. Accessed 10-13-08. Krugman ranks in their top 100 list.
  2. ^ The New York Times, "In Economics Departments, a Growing Will to Debate Fundamental Assumptions". Retrieved July 11, 2007.
  3. ^ a b Avinash Dixit, The Journal of Economic Perspectives, Vol. 7, No. 2 (Spring, 1993), pp. 173-188, In Honor of Paul Krugman: Winner of the John Bates Clark Medal, Retrieved March 28, 2007.
  4. ^ a b Paul Krugman, 2004. Retrieved March 28, 2007.
  5. ^ The New York Times, "Columnist Biography: Paul Krugman". Retrieved April 15, 2007.
  6. ^ Paul Krugman, "Your questions answered", blog, January 10, 2003, retrieved December 19, 2007
  7. ^ Paul Krugman, "About my son", New York Times blog, December 19, 2007
  8. ^ Interview, U.S. Economist Krugman Wins Nobel Prize in Economics "PBS, Jim Lehrer News Hour", October 13, 2008, transcript retrieved October 14, 2008
  9. ^ a b Hirsh, Michael (4 March 1996). "A Nobel-Bound Economist Punctures the C[onventional] W[isdom]--and Not a Few Big-Name Washington Egos". Newsweek. {{cite news}}: |access-date= requires |url= (help)
  10. ^ "2008 January - Paul Krugman - Op-Ed Columnist - New York Times Blog". Krugman.blogs.nytimes.com. Retrieved 2008-10-13.
  11. ^ Catherine Rampell (October 13, 2008, 7:50 a.m.). "Paul Krugman Wins Economics Nobel - Economix Blog - NYTimes.com". Economix.blogs.nytimes.com. Retrieved 2008-10-13. {{cite web}}: Check date values in: |date= (help)
  12. ^ http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?em
  13. ^ "Microsoft Word - sciback_cover_ek_2008_FINAL.doc" (PDF). Retrieved 2008-10-13.
  14. ^ (Krugman 1996a, Introduction)
  15. ^ a b Confessore, Nicholas (2002). "Comparative Advantage". Washington Monthly. Retrieved 2007-02-05. {{cite web}}: Unknown parameter |month= ignored (help)
  16. ^ Krugman, Paul (September 18, 2007). "Introducing This Blog". The New York Times. Retrieved 2007-09-19.
  17. ^ Washington Monthly profile from December 2002
  18. ^ ""The Great Unraveling: Losing Our Way in the New Century"". Powell's Books. Retrieved 2007-11-22.
  19. ^ The Economist - The one-handed economist Paul Krugman and the controversial art of popularising economics, November 13, 2003
  20. ^ Krugman, Paul. "The Great Wealth Transfer." Rolling Stone. November 30, 2006
  21. ^ Oct 17 2007- Krugman On Healthcare, Tax Cuts, Social Security, the Mortgage Crisis and Alan Greenspan, in response to Alan Greenspan's Sept 24 appearance with Naomi Klein on Democracy Now!
  22. ^ November 22, 2007- Tomansky, Michael The Partisan
  23. ^ "The Conscience of Paul Krugman - David Gordon - Mises Institute". Mises.org. Retrieved 2008-10-13.
  24. ^ "How bad is the mortgage crisis going to get?". Retrieved 2008-03-17.
  25. ^ http://www.youtube.com/watch?v=YwqcLbZJ4HA
  26. ^ a b c Paul Krugman, "My Connection With Enron, One More Time", Retrieved March 28, 2007.
  27. ^ Paul Krugman, "Me and Enron". Retrieved March 28, 2007.
  28. ^ "Newsweek, The Great Debunker: A Nobel-bound Economist Punctures the CW - and Not a Few Big-Name Washington Egos".
  29. ^ The Economist, Face Value: Paul Krugman, one-handed economist
  30. ^ Peter Ferrara, National Review, The Hysterical Opposition, August 22, 2001. Retrieved March 28, 2007.
  31. ^ Jack Shafer, Slate, Raines-ing in Andrew Sullivan
  32. ^ Daniel B. Klein with Harika Anna Bartlett, "Left Out: A Critique of Paul Krugman Based on a Comprehensive Account of His New York Times Columns, 1997 through 2006", Econ Journal Watch 5:1, 109-133.
  33. ^ Krugman, Paul. "Hate Springs Eternal". The New York Times. February 11, 2008.
  34. ^ Mother Jones, Paul Krugman, August 7, 2005. Retrieved March 28, 2007.
  35. ^ "Nobel Prize in Economics". Swedish Academy. Retrieved 2008-10-13.
  36. ^ "Top 5% Authors, as of September 2008". Research Papers in Economics. 2008-09. Retrieved 2008-10-13. {{cite web}}: Check date values in: |date= (help)

Media

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