Krugman Wins Nobel for Economics – washingtonpost.com
While I think the Nobel Prize for Economics should have just gone to the person that stated, “Sell in May and go away,” LOL, I thought it was still kind of awesome that the prize went to Paul Krugman.
I already knew he was an esteemed columnist and critic of the Bush administration, and I’ve seen him put on some tough gameface on Bloomberg clips such as this, but I never considered him a Nobel candidate until the news came out.
This article claims he was awarded for his, “work nearly 30 years ago in advancing a theory on trading patterns and why certain countries produce what they do.” Such as his studies on Japan, for instance.
But after going through all his writing, I believe what should truly be commended by the prize was his mind-boggling 1978 paper on interstellar trade:
“Abstract: This paper extends interplanetary trade theory to an interstellar setting. It is chiefly concerned with the following question: how should interest rates on goods in transit be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved… This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics.”
Quite jaw-dropping, isn’t it?
Krugman’s NYT blog has some fascinating theories and applications practice of economics infused in his writing, with focus on the general Austrian school of thought, some supply-side economic theory-bashing, and also neo-Keynesianism, instead of the general public policy stuff.
I think before Krugman contributed his views as an economist, there was very little work done on trade theory. What Krugman did was to define the field and allow for the study of economics to actually be given a voice and finally say something about issues like globalization.
As I shared in earlier paragraphs, he also wrote these studies on Japan and their economic crisis. In this particular piece, What Is Wrong with Japan?, he makes a very strong point about hyperinflation:
“But printing money is only inflationary if people spend it, and if that spending exceeds the economy’s capacity to produce.”
Which means that if the mere act of printing money/monies is hyperinflation, then the mere act of cooking lots of food will make you fat.
I guess I could go on and on, but I’ve provided some links in this review for you to explore Krugman’s brilliant mind and sound judgment yourselves. Stumblefree!