Paul Krugman has been awarded the 2008 Nobel Prize in Economics "for his analysis of trade patterns and location of economic activity"

Overman, Henry G.

LSE Research Online

30/06/2017 SERC: Spatial Economics Research Centre: Paul Krugman - Nobel Laureatehttp://spatial-economics.blogspot.co.uk/2008/10/paul-krugman-nobel-laureate.html 1/2Newer Post Older PostHomeSubscribe to: Post Comments (Atom)M o n d a y ,  1 3  O c t o b e r  2 0 0 8Posted by Prof Henry G. Overman on Monday, October 13, 2008 Paul Krugman - Nobel LaureatePaul Krugman has been awarded the 2008 Nobel Prize in Economics "for his analysis of trade patterns and location of economic activity". Krugman is actually a pretty controversial character in the (small) world of academic economic geography. When he came up with the theory that lead tothe "New Economic Geography", he managed effectively to ignore several decades worth of work in geography and to focus on mechanisms that wereconsidered "old hat". Traditional geographers did not like this one bit. But to many economists, this one included, Krugman's work was a revelation. Relative to much of the existing literature, Krugman started with individualfirms and workers (not "regions") as actors. Economic interactions between firms and their consumers (demand linkages) were put at the core ofunderstanding divergent outcomes. As transaction costs fell, relocation of these firms and works could change regional economic environments leadingto different development for initially similar regions. Outcomes could be "path dependent" so that history matters and similar changes need not alwayslead to the same outcomes. And these outcomes could be sub-optimal in terms of terms of both efficiency and outcomes. Krugman's work gives us all this in elegant mathematical models that increase our fundamental understanding of the forces that shape economicgeography. His theories continue to inspire a generation of economists who are interested in understanding these forces. Together with developments inurban economics, Krugman's New Economic Geography revitalized research in to the nature, extent, causes and consequences of spatial disparities. There is no doubt he will be controversial choice. He has been a vocal critic of Bush. Non-economists don't like him. Even some "purist" economistsmight have a problem with the decision. But for those of us interested in the application of rigorous economics to real world problems the award is a verywelcome one.Recommend this on GooglePost a CommentNo comments:0  More  Next Blog»30/06/2017 SERC: Spatial Economics Research Centre: Paul Krugman - Nobel Laureatehttp://spatial-economics.blogspot.co.uk/2008/10/paul-krugman-nobel-laureate.html 2/2Simple theme. Powered by Blogger.

Paul Krugman - Nobel Laureate

Abstract

Similar works

Full text

Available Versions

LSE Research Online