American Paul Krugman wins Nobel prize for economics

Tuesday, October 14, 2008

The announcement of Paul Krugman as the winner of the economics Nobel prize
All images: Prolineserver

American Paul Krugman yesterday won the Nobel Prize for Economics for developing a theory known as the “new trade theory” and “new economic geography”.

Krugman first released the above theory approximately thirty years ago, and it explained why rich countries will trade with rich countries.

As Krugman contributes to popular newspapers, such as The New York Times, with criticisms of the Bush administration and its financial policy, there has been speculation that Krugman's political opinions earned him the prize.

Tyler Cowen, a professor of economics at George Mason University, stated that he believed the award may have been motivated by politics. "They could have waited and nobody would have asked that question, he said. "It's fair speculation that in part they are making a political statement. Krugman does deserve it, though. It's not only a political statement."

Robert Solow, Krugman's former professor at the Massachusetts Institute of Technology, dismissed these claims, however. "I don't think it's true for one minute. I wouldn't be surprised if next year it was a conservative who wins. I really think that it's pure coincidence and there is no reason at all to suppose his columns [in newspapers] had any role in this choice."

Tore Ellingsen, who was in the committee that decided the winner also responded to the claims that the decision was political. He claimed that "we disregard everything except for the scientific merits," when choosing the winner.