Nobel Prize in economics awarded to Princeton University’s Paul Krugman

  Paul Krugman, a professor of economics and international affairs at Princeton since 2000, and a New York Times columnist has won the 2008 Nobel Prize in economics.
   Professor Krugman, the only winner this year, was recognized “for his analysis of trade patterns and location of economic activity.”
   ”It’s deeply gratifying,” said Professor Krugman early this morning in a statement released by the university. “There is so much shock involved that I can’t really sort out. I think it will take a few days before I can assess it.”
   According to the announcement posted by the Royal Swedish Academy of Sciences, “By having shown the effects of economies of scale on trade patterns and on the location of economic activity, his ideas have given rise to an extensive reorientation of the research on these issues.”
   In 1979, Professor Krugman proposed a new model that provided a theory for the effects of globalization and free trade. It offered a better explanation than the well-established theory for patterns, such as why increasing numbers of people flock to large cities, while rural areas become depopulated.
   ”When I began working on this, world trade was a lot smaller than it is now, so it certainly is relevant to the changed environment,” Professor Krugman said in the statement. “And I guess you could say I was being global before the world was. I was very concerned in the second part of this work with the location of people and industries within countries, and we certainly are seeing all of these issues about urban growth and regional growth in the U.S. These are issues that don’t go away.”