Four Freedoms Monument

Paul Krugman
Nationality	United States
Academic career
Field	Macroeconomics
School or tradition	Neo-Keynesian economics
Contributions	International Trade Theory, New Trade Theory

Paul Robin Krugman (Template:Pron-en; born February 28, 1953) is an American economist, columnist, author, and intellectual. He is professor of economics and international affairs at Princeton University, and is also a columnist for The New York Times, writing a blog and a twice-weekly op-ed column for the newspaper since 2000.

Krugman is well known in academia for his work in trade theory and for his textbook explanations of currency crises and New Trade Theory. His best known work provides a model in which firms and countries produce and trade because of economies of scale. He was a critic of the "New Economy" of the late 1990s. Krugman also criticized the fixed exchange rates in East and Southeast Asia, and Thailand's economic policies before the 1997 East Asian financial crisis. Just before the 1998 Russian financial crisis, he also criticized investors such as Long-Term Capital Management whose profits depended on the maintenance of fixed exchange rates. Krugman is generally considered a neo-Keynesian economist, with his views outlined in his books such as Peddling Prosperity. Krugman's International Economics: Theory and Policy (currently in its eighth edition) is a standard textbook on international economics without calculus. In 1991 he was awarded the John Bates Clark Medal by the American Economic Association. According to IDEAS/RePEc, he is among the 50 most influential economists in the world today. In 2008, he won the Nobel Memorial Prize in Economic Sciences.

Krugman is generally considered a political liberal or progressive, and is an ardent critic of the George W. Bush administration and its foreign and domestic policy. Unlike many economic pundits, he is also regarded as an important scholarly contributor by his peers. He has written over 200 scholarly papers and 20 books—some academic, and some written for the layperson.

Biography

Krugman was born into a Jewish family and grew up on Long Island, and majored in economics (though his initial interest was in history) as an undergraduate at Yale University. He earned a Ph.D. from MIT in 1977 and taught at Yale, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining the faculty of Princeton University, where he has been since 2000. He is married to Robin Wells, a fellow professor at Princeton, his second marriage; he has no children from either. From 1982 to 1983, he spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers. He is also a member of the international economic body, the Group of Thirty.

When Bill Clinton came into office in 1993, some believe that he considered Krugman for a leading post; Krugman says he was flown out for a meeting in Arkansas. Newsweek reported in 1996 that "Krugman's outspokenness [was] the main reason the Clinton administration didn't offer him a job." Krugman says he would not have been interested in such a job; he told Newsweek, "I'm temperamentally unsuited for that kind of role. You have to be very good at people skills, biting your tongue when people say silly things." Instead he continued to write journalism for wider audiences, first for Fortune and Slate, later for The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly. Krugman said that to answer what he called Pop Internationalism, "I would have to write essays for non-economists that were clear, effective, and entertaining."

In the early 1990s, he helped popularize the argument made by Laurence Lau and Alwyn Young, among others, that the growth of economies in East Asia was not the result of new and original economic models, but rather increased capital and labor inputs, which did not result in an increase in total factor productivity. His prediction was that future economic growth in East Asia would slow as it became more difficult to generate economic growth from increasing inputs.

In the 1990s, Krugman's focus was on what can be described as policy economics, which he attempted to explain to the general audience in such works as Peddling Prosperity and columns attacking what he described as "policy entrepreneurs" who were focused single-mindedly on particular solutions, which they proposed as solving every conceivable crisis. He was critical of industrial policy (an approach Clinton later dropped under the influence of Robert Rubin and Lawrence Summers) and argued in favor of free trade. (He writes on p. xxvi of his book The Great Unraveling that "I still have the angry letter Ralph Nader sent me when I criticized his attacks on globalization.")

Krugman was one of many economists to serve as a consultant for an advisory board for Enron; he did this in 1999, being paid $37,500 before New York Times rules required him to resign when he took a job as a columnist in 2000. He stated later the consulting was to "[offer] Enron executives briefings on economic and political issues" and that it had required him to "spend four days in Houston."

However, when the story of Enron's corporate scandals broke, critics accused him of having a conflict of interest and the job of having been a bribe to control media coverage, charges he denies forcefully. He points out that in columns written before and after the scandal, he disclosed his past Enron relationship when he wrote about the company. He also was critical of the company: he was one of the first writers to argue that deregulation of the California energy market had led to market-manipulation by energy companies (in a column in the New York Times on December 10, 2000 called "California Screaming"); Enron was the largest in this market; he criticized it directly in August 17, 2001. He writes in The Great Unraveling (p. 26) that

I was no more perceptive than anyone else; during the bull market years [of the late 1990s] some people did send me letters claiming that major corporations were cooking their books, but - to my great regret - I ignored them. However, when Enron - the most celebrated company of its time, lauded as the very model of a modern business enterprise - blew up, I immediately saw the implications: if such a famous and celebrated company could have been a Ponzi scheme, it was very unlikely that the rest of U.S. business was squeaky clean. In fact, it quickly became clear, the bubble years were both the cause and effect of an epidemic of corporate malfeasance.

His first column on the epidemic was published in The New York Times on February 1, 2002 with the title, "Two, Three, Many?"

Since January 2000, Krugman has contributed a twice-weekly column to the Op-Ed page of the New York Times, which has made him, in the words of the Washington Monthly, "the most important political columnist in America... he is almost alone in analyzing the most important story in politics in recent years — the seamless melding of corporate, class, and political party interests at which the Bush administration excels." In 2007, he began supplementing his Times column with a blog. In introducing it, he wrote, "Many of the posts will be supplements to my regular columns; I’ll be using this space to present the kind of information I can’t provide on the printed page – especially charts and tables, which are crucial to the way I think about most of the issues I write about."

In September, 2003, Krugman published a collection of his columns under the title, The Great Unraveling. Taken as a whole, it was a scathing attack on the Bush's administration's economic and foreign policies. His main argument was that the large deficits generated by the Bush administration—generated by decreasing taxes, increasing public spending, and fighting a war in Iraq — were in the long run unsustainable, and would eventually generate a major economic crisis. The book was a best-seller.

In 2007, Krugman published The Conscience of a Liberal. The book is a history of wealth and income gaps in the US in the 20th century. The book documents that the gap between rich and poor declined greatly in mid-century, then widened in the last two decades to levels higher than those in the Gilded Age of the 1920s. Most economists (including Krugman) have regarded the late-20th-century divergence as resulting largely from changes in technology and trade, but Krugman writes that government policies had played a much greater role both in reducing the gap in the 1930s through 1970s and in widening it in the 1980s through the present. He rebuked the Bush administration for policies that currently widen the gap between the rich and poor. Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense. The book was praised in outlets such as the New York Review of Books, but it was attacked by such organizations as the libertarian Von Mises institute, where it was argued to be overly political and virtually without ideologically-sympathetic economic content.

In 2008, in midst of the subprime mortgage crisis in the US, Krugman predicted that housing prices would drop 25% overall and up to 50% in locations such as Miami or Los Angeles.

Krugman was awarded the Nobel Prize in economics for his pioneering work in the New Trade Theory. In rewarding the award, the prize committee cites "By having integrated economies of scale into explicit general equilibrium models, Paul Krugman has deepened our understanding of the determinants of trade and the location of economic activity.."

Criticism

The journalist James Fallows spoke of his "gratuitous spleen," and Clinton commerce secretary Jeffrey Garten complained that "He behaves like someone with a massive chip on his shoulder."

A November 13, 2003 article in The Economist reads: "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…Overall, the effect is to give lay readers the illusion that Mr Krugman's perfectly respectable personal political beliefs can somehow be derived empirically from economic theory."

In his May 22, 2005 farewell column, New York Times ombudsman Daniel Okrent stated: "Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults." Okrent did not initially provide specific examples for his view, but a few days later was drawn from retirement into an email back-and-forth with Krugman wherein he listed several specific instances, publicly hosted by the new ombudsman's column. Okrent's chief complaint (which may have been prompted by conservative commentator Donald Luskin) was that in a May 2004 column, Krugman inappropriately mixed numbers from the Establishment and Household employment data, without explaining to readers that these two surveys use differing, and incompatible, methods. Krugman, in fact, did not use any Household data. He did provide a number for the necessary monthly job creation in order for employment to pace population growth, which was based on Census data. However, this form of "mixing" data sources is not uncommon (The same methodology is used in numerous government and journalistic documents, including the Bush Administration's 2004 Economic Report of the President). The administration assumed a slightly lower rate of "adult non-elderly" population growth, but nonetheless came up with a similar number: 110k per month, against Krugman's 140k. Okrent stated he consulted reader mail to identify what he called Krugman's "mis-hits."

Krugman's critics have accused him of employing what they called a "shrill" rhetorical style. Economist J. Bradford DeLong and other Krugman supporters responded by creating the website Shrillblog.

Economist Daniel B. Klein published during 2008 a paper in Econ Journal Watch that reviews and criticizes Krugman's columns for the New York Times. Klein contends that Krugman's "social-democratic impetus sometimes trumps people's interests, notably poor people's interests... Krugman has almost never come out against extant government interventions, even ones that expert economists seem to agree are bad, and especially so for the poor."

In the 2008 Presidential campaign, Krugman came under criticism from liberal bloggers after he offered repeated criticism of Democratic candidate Barack Obama and his supporters. The Huffington Post and several other progressive blogs particularly criticized one of Krugman's columns in which he characterized Obama supporters as 'cult-like', complained that the media had not given Obama sufficient scrutiny, and claimed that a special set of 'Clinton Rules' applied to the Clintons and not to others like Obama. The bloggers described what they alleged were close ties between Krugman and the Clintons, and wrote that his commentary was lopsided in this regard against Barack Obama. The Times' entire "Letters to the Editor" column of February 13, 2008 was given over to discussion of Krugman's controversial column. In his New York Times blog, Krugman scathingly denounced speculations that he had been offered or would accept any position in a Hillary Clinton administration, stating that he is "temperamentally unsuited to politics".

Awards

• 1991, American Economic Association, John Bates Clark Medal
• 2002, Editor and Publisher, Columnist of the Year
• 2004, Fundación Príncipe de Asturias (Spain), Prince of Asturias Awards in Social Sciences, the "European Pulitzer"
• 2004, Doctor of Humane Letters honoris causa, Haverford College[13]
• 2008, Nobel Prize in Economics- for his contributions to New Trade Theory.

See also

The Theory of Interstellar Trade

Bibliography

Authored or co-authored

• The Conscience of a Liberal (October 2007) (ISBN 978-0393060690).
• Economics: European Edition (with Robin Wells and Kathryn Graddy, Spring 2007) (ISBN 0-7167-9956-1).
• Macroeconomics (with Robin Wells, February 2006) (ISBN 0-7167-6763-5). Also available with student CDR (March 2006) (ISBN 0-7167-6767-8).
• Economics (with Robin Wells, December 2005) (ISBN 1-57259-150-1)
• Krugman Wall Street Journal Sub Card (???) {ISBN 0-7167-6697-3}
• Microeconomics (with Robin Wells, March 2004) (ISBN 0-7167-5997-7). Also available with student CDR (with Robin Wells, November 2004) (ISBN 0-7167-6700-7) or with study guide (with Robin Wells, December 2004) (ISBN 0-7167-6699-X).
• The Great Unraveling: Losing Our Way in the New Century (September 2003) (ISBN 0-393-05850-6)
  • A book of his New York Times columns, many of them dealing with Bush economic policies, some dealing with the economy in general.
• International Economics: Theory and Policy (7th Edition) (2006) (ISBN 0-321-29383-5)
• The New Trade Agenda (Foreign Affairs Editors' Choice) (December 2001) (ISBN 0-87609-302-0)
• Fuzzy Math: The Essential Guide to the Bush Tax Plan (May 4, 2001) (ISBN 0-393-05062-9)
• The Spatial Economy - Cities, Regions and International Trade (with Masahisa Fujita, Anthony Venables)(July 1999, MIT press) (ISBN 0-262-06204-6)
• The Return of Depression Economics (May 1, 1999) (ISBN 0-393-04839-X)
  • In this work Krugman considers the long economic stagnation of Japan through the 1990s, the Asian financial crisis, and problems in Latin America, and concludes that the generally accepted idea among economists that depressions can be prevented is no longer true.
• The Accidental Theorist and Other Dispatches from the Dismal Science (May 1, 1998) (ISBN 0-393-04638-9)
  • A collection of Krugman's articles for various publications regarding the economy.
• International Economics (March 1998) (ISBN 0-673-52186-9)
• The Age of Diminished Expectations, Third Edition (August 8, 1997) (ISBN 0-262-11224-8)
• Competitiveness (January 1, 1997)
• Pop Internationalism (March 1, 1996) (ISBN 0-262-11210-8)
• Self Organizing Economy (February 1, 1996) (ISBN 0-87609-177-X)
• Emu and the Regions (December 1995) (ISBN 1-56708-038-3)
• Development, Geography, and Economic Theory (Ohlin Lectures) (September 15, 1995) (ISBN 0-262-11203-5)
• Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations (April 1, 1995) (ISBN 0-393-31292-5)
  • A book for those seeking to understand the history of economic thought from the time of the first rumblings of revolt against Keynesianism to the present. Written for the economics layman.
• Foreign Direct Investment in the United States (3rd Edition) (February 1, 1995) (ISBN 0-88132-204-0)
• World Savings Shortage (September 1, 1994) (ISBN 0-88132-161-3)
• What Do We Need to Know About the International Monetary System? (Essays in International Finance, No 190 July 1993) (June 1, 1993) (ISBN 0-88165-097-8)
• Currencies and Crises (June 11, 1992) (ISBN 0-262-11165-9)
• Geography and Trade (Gaston Eyskens Lecture Series) (August 1991) (ISBN 0-262-11159-4)
• The Risks Facing the World Economy (July 1991) (ISBN 1-56708-073-1)
• Has the Adjustment Process Worked? (Policy Analyses in International Economics, 34) (June 1, 1991) (ISBN 0-88132-116-8)
• Rethinking International Trade (April 1, 1990) (ISBN 0-262-11148-9)
• Trade Policy and Market Structure (March 30, 1989) (ISBN 0-262-08182-2)
• Exchange-Rate Instability (Lionel Robbins Lectures) (November 2, 1988) (ISBN 0-262-11140-3)
• Adjustment in the World Economy (August 1987) (ISBN 1-56708-023-5)
• Strategic Trade Policy and the New International Economics (January 1986) (ISBN 0-262-11112-8)
• Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1, 1985) (ISBN 0-262-08150-4)

Edited or co-edited

• Currency Crises (National Bureau of Economic Research Conference Report) (September 1, 2000) (ISBN 0-226-45462-2)
• Trade with Japan : Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1, 1995) (ISBN 0-226-45459-2/)
• Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April 15, 1994) (ISBN 0-226-45460-6)
• Exchange Rate Targets and Currency Bands (October 1991) (ISBN 0-521-41533-0)

External links

• New York Times Paul Krugman index of columns
• Paul Krugman's The Conscience of a Liberal Blog
• Paul Krugman's page on Academia.edu
• KrugmanOnline.com features books by Paul Krugman.
• The Unofficial Paul Krugman Archive contains most if not every (pre Times Select) article written by Paul Krugman.
• Paul Krugman (Princeton) - placeholder
• Paul Krugman (MIT) archives of his Slate and Fortune columns plus other writings 1996-2000
• Template:Worldcat id
• Open Directory Project - Paul Krugman directory category
• Paul Krugman at IMDb
• IDEAS/RePEc
• Michael Tomasky essay on Krugman's The Conscience of a Liberal from The New York Review of Books

Media

• Video: Open Mind Interview, 2002: Part One, 2002,Part Two
• Video: "Meet Paul Krugman", New York Times biographical video interview, Sept. 19, 2005
• Audio: The New Class War In America featuring Amy Goodman, Paul Krugman, Greg Palast and Randi Rhodes recorded on June 13, 2006 at The New York Society for Ethical Culture, mp3 format, Video: alternate
• Video: Paul Krugman speaks at the World Affairs Council - Sept. 2007
• Audio: Unterview by Paul "Dr. Beardy" Krugman on Liberadio(!) with Mary Mancini and Freddie O'Connell, October 22, 2007
• Video: Iinterview with The Young Turks on Air America Radio, October 29, 2007
• Video: About housing bubble, December 14, 2007
• Video: The Conscience of a Liberal (November 3, 2007) - lecture from Mr. Krugman's 2007 book tour.