The Swedish Academy of Sciences has awarded the 2008 Nobel Memorial Prize in Economic Sciences to Paul Krugman, in recognition of his contribution to trade theory and specifically for his work on the effect of economies of scale in international trade.
Although Prof. Krugman is perhaps better known these days for his columns in the New York Times and his strong criticism of the Bush administration, trade wonks are well aware of his scholarly contributions, which number in the hundreds of scholarly journal articles and tens of books (including, jointly with Maurice Obstfeld, my undergraduate trade textbook). He won the John Bates Clark medal in economics in 1991, an arguably tougher prize to win than the Nobel.
I have my concerns with Prof. Krugman’s later work and his tendency to allow his political views to trump economic good sense. As the Economist [$] wrote in 2003 “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…” He is generally considered to be a big-government liberal. But the prize was not awarded for his NYT columns or his opinions on economic or foreign policy.
The Nobel is much deserved, even if Prof. Krugman’s rants have led him to stray far from his admirable trade-theory roots.