Paul Robin Krugman (; born February 28, 1953) is an American economist, Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times. In 2008, Krugman won the Sveriges Riksbank Prize in Economic Sciences (informally the Nobel Prize in Economics) for his contributions to New Trade Theory and New Economic Geography. According to the Nobel Prize Committee, the prize was given for Krugman's work explaining the patterns of international trade and the geographic concentration of wealth, by examining the impact of economies of scale and of consumer preferences for diverse goods and services.
Krugman is known in academia for his work on international economics (including trade theory, economic geography, and international finance), liquidity traps and currency crises. He is the 19th most widely cited economist in the world today.
, Krugman has written 20 books and has published over 200 scholarly articles in professional journals and edited volumes. He has also written more than 750 columns dealing with current economic and political issues for The New York Times.
He also writes on various topics ranging from income distribution to international economics. Krugman considers himself a liberal, calling one of his books and his New York Times blog "The Conscience of a Liberal". His commentary has attracted considerable comment and criticism.
Personal life
Krugman is the son of David and Anita Krugman and the grandson of
Jewish immigrants from
Brest-Litovsk. He was born in
Albany, NY, and grew up in
Nassau County, New York. He graduated from
John F. Kennedy High School in
Bellmore. Krugman's first wife was award-winning designer/artist Robin L. Bergman. He is currently married to
Robin Wells, his second wife, a yoga instructor and academic economist who has collaborated on textbooks with Krugman. Krugman reports that he is a distant relative of conservative journalist
David Frum. He has described himself as a "Loner. Ordinarily shy. Shy with individuals." He lives with his wife in
Princeton, New Jersey.
According to Krugman, his interest in economics began with Isaac Asimov's Foundation novels, in which the social scientists of the future use "psychohistory" to attempt to save civilization. Since "psychohistory" in Asimov's sense of the word does not exist, Krugman turned to economics, which he considered the next best thing.
Academic career
Krugman earned his B.A. in economics from Yale University summa cum laude in 1974 and his PhD from the Massachusetts Institute of Technology (MIT) in 1977. While at MIT he was part of a small group of MIT students sent to work for the Central Bank of Portugal for three months in summer 1976, in the chaotic aftermath of the Carnation Revolution. 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 taught at Yale University, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining Princeton University in 2000 as professor of economics and international affairs. He is also currently a centenary professor at the London School of Economics, and a member of the Group of Thirty international economic body. He has been a research associate at the National Bureau of Economic Research since 1979. Most recently, Krugman was President of the Eastern Economic Association.
Paul Krugman has written extensively on international economics, including international trade, economic geography, and international finance. The Research Papers in Economics project ranked him as the 14th most influential economist in the world as of March 2011 based on his academic contributions. Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld, is a standard undergraduate textbook on international economics. He is also co-author, with Robin Wells, of an undergraduate economics text which he says was strongly inspired by the first edition of Paul Samuelson's classic textbook. Krugman also writes on economic topics for the general public, sometimes on international economic topics but also on income distribution and public policy.
The Nobel Prize Committee stated that Krugman's main contribution is his analysis of the impact of economies of scale, combined with the assumption that consumers appreciate diversity, on international trade and on the location of economic activity. The importance of spatial issues in economics has been enhanced by Krugman's ability to popularize this complicated theory with the help of easy-to-read books and state-of-the-art syntheses. "Krugman was beyond doubt the key player in 'placing geographical analysis squarely in the economic mainstream' ... and in conferring it the central role it now assumes."
In 1978, Krugman wrote The Theory of Interstellar Trade, a tongue-in-cheek essay on computing interest rates on goods in transit near the speed of light. He says he wrote it to cheer himself up when he was "an oppressed assistant professor".
New trade theory
Prior to Krugman's work, trade theory (see
David Ricardo and
Hecksher-Ohlin model) emphasized trade based on the
comparative advantage of countries with very different characteristics, such as a country with a high agricultural
productivity trading agricultural products for industrial products from a country with a high industrial productivity. However, in the 20th century, an ever larger share of trade occurred between countries with very similar characteristics, which is difficult to explain by comparative advantage. Krugman's explanation of trade between similar countries was proposed in a 1979 paper in the
Journal of International Economics, and involves two key assumptions: that consumers prefer a diverse choice of brands, and that production favors
economies of scale. Consumers' preference for diversity explains the survival of different versions of cars like Volvo and BMW. But because of economies of scale, it is not profitable to spread the production of
Volvos all over the world; instead, it is concentrated in a few factories and therefore in a few countries (or maybe just one). This logic explains how each country may specialize in producing a few brands of any given type of product, instead of specializing in different types of products.
Many models of international trade now follow Krugman's lead, incorporating economies of scale in production and a preference for diversity in consumption. This way of modeling trade has come to be called New Trade Theory.
Krugman's theory also took into account transportation costs, a key feature in producing the "home market effect", which would later feature in his work on the new economic geography. The home market effect "states that, ceteris paribus, the country with the larger demand for a good shall, at equilibrium, produce a more than proportionate share of that good and be a net exporter of it." The home market effect was an unexpected result, and Krugman initially questioned it, but ultimately concluded that the mathematics of the model were correct.
When there are economies of scale in production, it is possible that countries may become 'locked in' to disadvantageous patterns of trade. Nonetheless, trade remains beneficial in general, even between similar countries, because it permits firms to save on costs by producing at a larger, more efficient scale, and because it increases the range of brands available and sharpens the competition between firms. Krugman has usually been supportive of free trade and globalization. He has also been critical of industrial policy, which New Trade Theory suggests might offer nations rent-seeking advantages if "strategic industries" can be identified, saying it's not clear that such identification can be done accurately enough to matter.
New economic geography
It took an interval of eleven years, but ultimately Krugman's work on New Trade Theory (NTT) converged to what is usually called the "new economic geography" (NEG), which Krugman began to develop in a seminal 1991 paper in the
Journal of Political Economy. In Krugman's own words, the passage from NTT to NEG was "obvious in retrospect; but it certainly took me a while to see it. ... The only good news was that nobody else picked up that $100 bill lying on the sidewalk in the interim." This would become Krugman's most-cited academic paper: by early 2009, it had 857 citations, more than double his second-ranked paper. Krugman called the paper "the love of my life in academic work."
The "home market effect" that Krugman discovered in NTT also features in NEG, which interprets agglomeration "as the outcome of the interaction of increasing returns, trade costs and factor price differences." If trade is largely shaped by economies of scale, as Krugman's trade theory argues, then those economic regions with most production will be more profitable and will therefore attract even more production. That is, NTT implies that instead of spreading out evenly around the world, production will tend to concentrate in a few countries, regions, or cities, which will become densely populated but will also have higher levels of income.
International finance
Krugman has also been influential in the field of
international finance. As a graduate student, Krugman visited the
Federal Reserve Board, where
Stephen Salant and Dale Henderson were completing their discussion paper on
speculative attacks in the gold market. Krugman adapted their model for the foreign exchange market, resulting in a 1979 paper on
currency crises in the
Journal of Money, Credit, and Banking, which showed that
fixed exchange rate regimes are unlikely to end smoothly: instead, they end in a sudden
speculative attack. Krugman's paper is considered one of the main contributions to the
'first generation' of
currency crisis models, and it is his second-most-cited paper (457 citations as of early 2009).
In response to the global financial crisis of 2008, Krugman proposed, in an informal "mimeo" style of publication, an "international finance multiplier", to help explain the unexpected speed with which the global crisis had occurred. He argued that when, "highly leveraged financial institutions [HLIs], which do a lot of cross-border investment [....] lose heavily in one market [...] they find themselves undercapitalized, and have to sell off assets across the board. This drives down prices, putting pressure on the balance sheets of other HLIs, and so on." Such a rapid contagion had hitherto been considered unlikely because of "decoupling" in a globalized economy. He first announced that he was working on such a model on his blog, on October 5, 2008. Within days of its appearance, it was being discussed on some popular economics-oriented blogs. The note was soon being cited in papers (draft and published) by other economists, even though it had not itself been through ordinary peer review processes.
Macroeconomics and fiscal policy
Krugman has done much to revive discussion of the
liquidity trap as a topic in economics. He recommended aggressive fiscal policy to counter
Japan's
lost decade in the 1990s, arguing that the country was mired in a Keynesian
liquidity trap. The debate he started at that time over liquidity traps and what policies best address them continues in the economics literature.
Krugman had argued in The Return of Depression Economics that Japan was in a liquidity trap in the late 1990s, since the central bank could not drop interest rates any lower to escape economic stagnation. The core of Krugman's policy proposal for addressing Japan's liquidity trap was inflation targeting, which, he argued "most nearly approaches the usual goal of modern stabilization policy, which is to provide adequate demand in a clean, unobtrusive way that does not distort the allocation of resources." The proposal appeared first in a web posting on his academic site. This mimeo-draft was soon cited, but was also misread by some as repeating his earlier advice that Japan's best hope was in "turning on the printing presses", as recommended by Milton Friedman, John Makin, and others.
Krugman has since drawn parallels between Japan's 'lost decade' and the late 2000s recession, arguing that expansionary fiscal policy is necessary as the major industrialized economies are mired in a liquidity trap. In response to economists who point out that the Japanese economy recovered despite not pursuing his policy prescriptions, Krugman maintains that it was an export-led boom that pulled Japan out of its economic slump in the late-90s, rather than reforms of the financial system.
Sveriges Riksbank Prize in Economic Sciences
Krugman was awarded the
Sveriges Riksbank Prize in Economic Sciences (informally the
Nobel Prize in Economics), the sole recipient for 2008. This prize includes an award of about $1.4 million and was given to Krugman for his work associated with
New Trade Theory and the New Economic Geography. In the words of the prize committee, "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."
Awards
1991,
American Economic Association,
John Bates Clark Medal. Since it was awarded to only one person, once every two years (prior to 2009),
The Economist has described the Clark Medal as 'slightly harder to get than a Nobel prize'. 1992, Fellow of the
American Academy of Arts and Sciences (AAAS). 1995, Adam Smith Award of the
National Association for Business Economics 1998, Doctor honoris causa in Economics awarded by Free University of Berlin Freie Universität Berlin in Germany 2000, H.C. Recktenwald Prize in Economics, awarded by University of Erlangen-Nuremberg in Germany. 2002,
Editor and Publisher, Columnist of the Year. 2004, Fundación Príncipe de Asturias (Spain),
Prince of Asturias Awards in Social Sciences. 2004, Doctor of Humane Letters
honoris causa,
Haverford College 2008, Sveriges Riksbank Prize in Economic Sciences (informally the
Nobel Prize in Economics) for Krugman's contributions to
New Trade Theory. He became the twelfth
John Bates Clark Medal winner to be awarded the Nobel Memorial Prize. 2012,
Doctor honoris causa from the
Universidade de Lisboa,
Universidade Técnica de Lisboa and
Universidade Nova de Lisboa Author
In the 1990s, besides academic books and textbooks, Krugman increasingly began writing books for a general audience on issues he considered important for public policy. In
The Age of Diminished Expectations (1990), he wrote in particular about the increasing
US income inequality in the "
New Economy" of the 1990s. He attributes the rise in income inequality in part to changes in technology, but principally to a change in political atmosphere which he attributes to
Movement Conservatives.
In September 2003, Krugman published a collection of his columns under the title, The Great Unraveling, about the Bush administration's economic and foreign policies and the US economy in the early 2000s. His columns argued that the large deficits during that time were generated by the Bush administration as a result of decreasing taxes on the rich, increasing public spending, and fighting the Iraq war. Krugman wrote that these policies were unsustainable in the long run and would eventually generate a major economic crisis. The book was a best-seller.
In 2007, Krugman published The Conscience of a Liberal, whose title references Barry Goldwater's Conscience of a Conservative. It details the history of wealth and income gaps in the United States in the 20th century. The book describes how the gap between rich and poor declined greatly in middle of the century, and then widened in the last two decades to levels higher even than in the 1920s. In Conscience, Krugman argues that government policies played a much greater role than commonly thought both in reducing inequality in the 1930s through 1970s and in increasing it in the 1980s through the present, and criticizes the Bush administration for implementing policies that Krugman believes widened the gap between the rich and poor.
Krugman also argued that Republicans owed their electoral successes to their ability to exploit the race issue to win political dominance of the South. Krugman argues that Ronald Reagan had used the "Southern Strategy" to signal sympathy for racism without saying anything overtly racist, citing as an example Reagan's coining of the term "welfare queen".
In his book, Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense. Liberal journalist and author Michael Tomasky argued that in The Conscience of a Liberal Krugman is committed "to accurate history even when some fudging might be in order for the sake of political expediency." In a review for The New York Times, Pulitzer prize-winning historian David M. Kennedy stated, "Like the rants of Rush Limbaugh or the films of Michael Moore, Krugman's shrill polemic may hearten the faithful, but it will do little to persuade the unconvinced".
In late 2008, Krugman published a substantial updating of an earlier work, entitled "The Return of Depression Economics and the Crisis of 2008". In the book, he discusses the failure of the United States regulatory system to keep pace with a financial system increasingly out-of-control, and the causes of and possible ways to contain the greatest financial crisis since the 1930s.
Commentator
Since then, economist
J. Peter Neary has noted that Krugman "has written on a wide range of topics, always combining one of the best prose styles in the profession with an ability to construct elegant, insightful and useful models." Neary added that "no discussion of his work could fail to mention his transition from Academic Superstar to Public Intellectual. Through his extensive writings, including a regular column for
The New York Times, monographs and textbooks at every level, and books on economics and current affairs for the general public ... he has probably done more than any other writer to explain economic principles to a wide audience." Krugman has been described as the most controversial economist in his generation and according to
Michael Tomasky since 1992 he has moved "from being a center-left scholar to being a liberal polemicist."
From the mid-1990s onwards, Krugman wrote for Fortune (1997–99) and Slate (1996–99), and then for The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly. In this period Krugman critiqued various positions commonly taken on economic issues from across the political spectrum, from protectionism and opposition to the World Trade Organization on the left to supply side economics on the right.
During the 1992 presidential campaign Krugman praised Bill Clinton's economic plan in The New York Times, and Clinton's campaign used some of Krugman's work on income inequality. At the time, it was considered likely that Clinton would offer him a position in the new administration, but allegedly Krugman's volatility and outspokenness caused Clinton to look elsewhere. Krugman later said that he was "temperamentally unsuited for that kind of role. You have to be very good at people skills, biting your tongue when people say silly things." In a Fresh Dialogues interview, Krugman added, "you have to be reasonably organized...I can move into a pristine office and within three days it will look like a grenade went off."
In 1999, near the height of the dot com boom, The New York Times approached Krugman to write a bi-weekly column on "the vagaries of business and economics in an age of prosperity." His first columns in 2000 addressed business and economic issues, but as the 2000 US presidential campaign progressed, Krugman increasingly focused on George W. Bush's policy proposals. According to Krugman, this was partly due to "the silence of the media - those 'liberal media' conservatives complain about...." Krugman accused Bush of repeatedly misrepresenting his proposals, and criticized the proposals themselves. After Bush's election, and his perseverance with his proposed tax cut in the midst of the slump (which Krugman argued would do little to help the economy but substantially raise the fiscal deficit), Krugman's columns grew angrier and more focused on the administration. As Alan Blinder put it in 2002, "There's been a kind of missionary quality to his writing since then ... He's trying to stop something now, using the power of the pen." Partly as a result, Krugman's twice-weekly column on the Op-Ed page of The New York Times has made him, according to Nicholas Confessore, "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 an interview in late 2009, Krugman said his missionary zeal had changed in the post-Bush era and he described the Obama administration as "good guys but not as forceful as I'd like...When I argue with them in my column this is a serious discussion. We really are in effect speaking across the transom here." Krugman says he's more effective at driving change outside the administration than inside it, "now, I'm trying to make this progressive moment in American history a success. So that's where I'm pushing."
Krugman's columns have drawn criticism as well as praise. A 2003 article in The Economist questioned Krugman's "growing tendency to attribute all the world's ills to George Bush," citing critics who felt that "his relentless partisanship is getting in the way of his argument" and claiming errors of economic and political reasoning in his columns. Daniel Okrent, a former The New York Times ombudsman, in his farewell column, criticized Krugman for what he said was "the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults."
Krugman's New York Times blog is "The Conscience of a Liberal," devoted largely to economics and politics.
Five days after 9/11 terrorist attacks Krugman argued in his column that calamity was "partly self-inflicted" due to transfer of responsibility for airport security from government to airlines. His column provoked an angry response and The New York Times was flooded with complaints. According to Larissa MacFarquhar of The New Yorker, while some people thought that he was too partisan to be a columnist for The New York Times, he was revered on the left. Similarly, on the 10th anniversary of the 9/11 on the United States Krugman again provoked a controversy by accusing on his New York Times blog former U.S. President George W. Bush and former New York City mayor Rudy Giuliani of rushing "to cash in on the horror" after the attacks and describing the anniversary as "an occasion for shame".
East Asian growth
In a 1994
Foreign Affairs article, Paul Krugman argued that it was a
myth that the economic successes of the
East Asian 'tigers' constituted an economic miracle. He argued that their rise was fueled by mobilizing resources and that their growth rates would inevitably slow. His article helped popularize the argument made by
Lawrence 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 from high
capital investment and increasing
labor force participation, and that total factor productivity had not increased. Krugman argued that in the long term, only increasing
total factor productivity can lead to sustained
economic growth. Krugman's article was highly criticized in many Asian countries when it first appeared, and subsequent studies disputed some of Krugman's conclusions. However, it also stimulated a great deal of research, and may have caused the
Singapore government to provide incentives for technological progress.
During the 1997 Asian financial crisis, Krugman advocated currency controls as a way to mitigate the crisis. Writing in a Fortune magazine article, he suggested exchange controls as "a solution so unfashionable, so stigmatized, that hardly anyone has dared suggest it." Malaysia was the only country that adopted such controls, and although the Malaysian government credited its rapid economic recovery on currency controls, the relationship is disputed. An empirical study found that the Malaysian policies produced faster economic recovery and smaller declines in employment and real wages. Krugman later stated that the controls might not have been necessary at the time they were applied, but that nevertheless "Malaysia has proved a point—namely, that controlling capital in a crisis is at least feasible." Krugman more recently pointed out that emergency capital controls have even been endorsed by the IMF, and are no longer considered radical policy.
U.S. economic policies
In the early 2000s, Krugman repeatedly criticized the
Bush tax cuts, both before and after they were enacted. Krugman argued that the tax cuts enlarged the budget deficit without improving the economy, and that they enriched the wealthy – worsening
income distribution in the US. Krugman advocated lower interest rates (to promote spending on housing and other durable goods), and increased government spending on infrastructure, military, and unemployment benefits, arguing that these policies would have a larger stimulus effect, and unlike permanent tax cuts, would only temporarily increase the budget deficit.
In August 2005, after Alan Greenspan expressed concern over housing markets, Krugman criticized Greenspan's earlier reluctance to regulate the mortgage and related financial markets, arguing that "[he's] like a man who suggests leaving the barn door ajar, and then – after the horse is gone – delivers a lecture on the importance of keeping your animals properly locked up."
Krugman has repeatedly expressed his view that Greenspan and Phil Gramm are the two individuals most responsible for causing the subprime crisis. Krugman points to Greenspan and Gramm for the key roles they played in keeping derivatives, financial markets, and investment banks unregulated, and to the Gramm-Leach-Bliley Act, which repealed Great Depression era safeguards that prevented commercial banks, investment banks and insurance companies from merging.
Krugman has also been critical of some of the Obama administration's economic policies. He has criticized the Obama stimulus plan as being too small and inadequate given the size of the economy and the banking rescue plan as misdirected; Krugman wrote in The New York Times: "an overwhelming majority [of the American public] believes that the government is spending too much to help large financial institutions. This suggests that the administration's money-for-nothing financial policy will eventually deplete its political capital." In particular, he considered the Obama administration's actions to prop up the US financial system in 2009 to be impractical and unduly favorable to Wall Street bankers. In anticipation of President Obama's Job Summit in December 2009, Krugman said in a Fresh Dialogues interview, "This jobs summit can't be an empty exercise…he can't come out with a proposal for $10 or $20 Billion of stuff because people will view that as a joke. There has to be a significant job proposal…I have in mind something like $300 Billion."
Krugman has recently criticized China's exchange rate policy, which he believes to be a significant drag on global economic recovery from the Late-2000s recession, and he has advocated a "surcharge" on Chinese imports to the US in response. Jeremy Warner of The Daily Telegraph accused Krugman of advocating a return to self-destructive protectionism.
In April 2010, as the Senate began considering new financial regulations, Krugman argued that the regulations should not only regulate financial innovation, but also tax financial-industry profits and remuneration. He cited a paper by Andrei Shleifer and Robert Vishny released the previous week, which concludes that most innovation was in fact about "providing investors with false substitutes for [traditional] assets like bank deposits," and once investors realize the sheer number of securities that are unsafe a "flight to safety" occurs which necessarily leads to "financial fragility."
In his June 28, 2010 column in The New York Times, in light of the recent G-20 Toronto Summit, Krugman criticized world leaders for agreeing to halve deficits by 2013. Krugman claimed that these efforts could lead the global economy into the early stages of a "third depression" and leave "millions of lives blighted by the absence of jobs." He advocated instead the continued stimulus of economies to foster greater growth.
Economic views
Krugman identifies as a
Keynesian and a
saltwater economist, and he has criticized the
freshwater school on
macroeconomics. Though he applies
New Keynesian theory in some of his work, he has also criticized it for lacking predictive power and for hewing to ideas like the
efficient markets hypothesis and
rational expectations. Since the 1990s, he has promoted the
IS-LM model as invented by
John Hicks, pointing out its relative simplicity compared to
New Keynesianism and continued currency in practical economic policy.
In the wake of the 2007-2009 financial crisis he has remarked that he is "gravitating towards a Keynes-Fisher-Minsky view of macroeconomics." Post-Keynesian observers cite commonalities between Krugman's views and those of the Post-Keynesian school. In recent academic work, he has collaborated with Gauti Eggertsson on a New Keynesian model of debt-overhang and debt-driven slumps, inspired by the writings of Irving Fisher, Hyman Minsky, and Richard Koo. Their work argues that during a debt-driven slump, the "paradox of toil", together with the paradox of flexibility, can exacerbate a liquidity trap, reducing demand and employment.
Free trade
Krugman's views on free trade have provoked considerable ire from the anti-globalism movement. He once famously quipped that, "If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of
Comparative Advantage' and 'I advocate
Free Trade'." However, in the same article, Krugman argues that, given the findings of New Trade Theory, : ... free trade is not passé, but ... has irretrievably lost its innocence. Its status has shifted from optimum to reasonable rule of thumb...it can never again be asserted as the policy that economic theory tells us is always right.
Nevertheless, Krugman declares in favor of free trade given the enormous political costs of actively engaging in strategic trade policy (i.e. rent-seeking) and because there is no clear method for a government to discover which industries will ultimately yield positive returns. In the same article, Krugman expressed that the phenomena of increasing returns (of which strategic trade policy depends) does not disprove the underlying truth behind comparative advantage.
Political views
Krugman describes himself as
liberal, and has explained that he views the term "liberal" in the American context to mean "more or less what
social democratic means in Europe." In a 2009
Newsweek article,
Evan Thomas described Krugman as having "all the credentials of a ranking member of the
East coast liberal establishment" but also as someone who is anti-establishment, a "scourge of the Bush administration," and a critic of the Obama administration. In 1996,
Newsweek [[Michael Hirsh (journalist)|Michael Hirsh ]] remarked "Say this for Krugman: though an unabashed liberal ... he's ideologically colorblind. He savages the supply-siders of the Reagan-Bush era with the same glee as he does the 'strategic traders' of the Clinton administration."
Krugman has advocated free markets in contexts where they are often viewed as controversial. He has written against rent control in favor of supply and demand, likened the opposition against free trade and globalization to the opposition against evolution via natural selection, opposed farm subsidies, argued that sweatshops are preferable to unemployment, dismissed the case for living wages, argued against mandates, subsidies, and tax breaks for ethanol, and questioned NASA's manned space flights. Krugman has also criticized U.S. zoning laws and European labor market regulation.
U.S. race relations
Krugman has repeatedly criticized the Republican Party leadership for what he sees as a strategic (but largely tacit) reliance on racial divisions. In his
Conscience of a Liberal, he wrote
Krugman also defended Glenn Loury, a conservative black economist at Brown University, who defied many African-American political leaders by arguing that "The problems facing African-Americans had changed. The biggest barrier to progress was no longer active racism of whites but internal social problems of the black community."
On working in the Reagan administration
Krugman worked for
Martin Feldstein when the latter was appointed chairman of the
Council of Economic Advisers and chief economic advisor to President
Ronald Reagan. He later wrote in an autobiographical essay, "It was, in a way, strange for me to be part of the Reagan Administration. I was then and still am an unabashed defender of the
welfare state, which I regard as the most decent social arrangement yet devised." Krugman found the time "thrilling, then disillusioning". He did not fit into the Washington political environment, and was not tempted to stay on.
On Gordon Brown vs David Cameron
Although Krugman includes
Gordon Brown among those he considers at fault for the
Late-2000s financial crisis, he has also praised the former
British Prime Minister, whom he described as "more impressive than any
US politician" after a three-hour conversation with him. Krugman asserted that Brown "defined the character of the worldwide financial rescue effort" and urged British voters not to support the opposition
Conservative Party in the
2010 General Election, arguing their Party Leader
David Cameron "has had little to offer other than to raise the red flag of fiscal panic."
Controversies
Partisanship
In a 2003 article,
The Economist noted that Krugman's critics argue that "his relentless partisanship is getting in the way of his argument".
The Economist also wrote that the vast majority of Krugman's columns feature attacks on
Republicans and almost none criticize
Democrats, making him "a sort of ivory-tower folk-hero of the American
left—a thinking person's
Michael Moore".
Libertarian conservative and federal appeals court judge Richard Posner called Krugman "an unabashed Democratic partisan who often goes overboard in his hatred of the Republicans."
Liberal journalist and author Michael Tomasky in The New York Review of Books stated "Many liberals would name Paul Krugman of The New York Times as perhaps the most consistent and courageous—and unapologetic—liberal partisan in American journalism." New York Magazine called Krugman "the leading exponent of a kind of liberal purism", while liberal historian Michael Kazin has opined that Krugman's account of the right succumbed to the Marxist flaw of false consciousness.
Economics and policy recommendations
Economist and former
United States Secretary of the Treasury Larry Summers has stated Krugman has a tendency to favor more extreme policy recommendations because "it's much more interesting than agreement when you're involved in commenting on rather than making policy."
According to Harvard professor of economics Robert Barro, Krugman "has never done any work in Keynesian macroeconomics" and makes arguments that are politically convenient for him. Nobel laureate Edward Prescott charged that Krugman "doesn't command respect in the profession", as "no respectable macroeconomist" believes that economic stimulus works.
Enron
In early 1999, Krugman served on an advisory panel (including
Larry Lindsey and
Robert Zoellick) that offered
Enron executives briefings on economic and political issues. He resigned from the panel in the fall of 1999 to comply with
The New York Times rules regarding conflicts of interest, when he accepted the
Times offer to become an op-ed columnist. Krugman later stated that he was paid $37,500 (not $50,000 as often reported - his early resignation cost him part of his fee), and that, for consulting that required him to spend four days in
Houston, the fee was "rather low compared with my usual rates", which were around $20,000 for a one-hour speech. He also stated that the advisory panel "had no function that I was aware of", and that he later interpreted his role as being "just another brick in the wall" Enron used to build an image.
When the story of Enron's corporate scandals broke two years later, Krugman was accused of unethical journalism, specifically of having a conflict of interest. Some of his critics claimed that "The Ascent of E-man," an article Krugman wrote for Fortune magazine about the rise of the market as illustrated by Enron's energy trading, was biased by Krugman's earlier consulting work for them. Krugman later argued that "The Ascent of E-Man" was in character, writing "I have always been a free-market Keynesian: I like free markets, but I want some government supervision to correct market failures and ensure stability." Krugman noted his previous relationship with Enron in that article and in other articles he wrote on the company. Krugman was one of the first to argue that deregulation of the California energy market had led to market manipulation by energy companies.
Contradictions
Paul Krugman has been frequently accused of contradicting himself and having at some point of time supported the positions of his opponents. Krugman's supporters argue that these criticisms are from his political opponents and the critics argue that the contradictions are documented.
According to the wiki on Mises Institute, an Austrian school think-tank, Krugman has garnered a reputation for contradicting himself on many occasions. When documenting such inconsistencies several writers have made references to such an occurrence being commonplace: "It's not newsworthy when Paul Krugman contradicts himself." "Not that you needed any more evidence that New York Times columnist Paul Krugman is a flip-flopping charlatan..." "This just in: New York Times columnist Paul Krugman is a raging hypocrite. You'll be shocked to find out, I'm sure."
In addition to the instance reported in the WSJ (see above), a single article published in the conservative online magazine The American Thinker documents Krugman making contradictory statements in a wide variety of topics. He is documented as stating that when deficits are high interest rates are low, and when governments run up a deficit, interest rates rise. He argued that higher national debt and spending were bad for people early in their careers, as they would have to pay for it later in life, and nearly twenty-five years later, he argues that the national debt is not a problem, as it never needs to be paid off. Krugman argued it is not the debt that matters, but rather the debt-to-GDP ratio. But in an open letter to Alan Greenspan he asserted, "...you obviously realize that the ratio of debt to G.D.P. is a highly misleading number." He has argued that Social Security is sustainable and unsustainable, opposed government-run health care before supporting government-run health care, and opposed the bailout of Fannie Mae before congratulating the government for the bailout of Fannie Mae.
Krugman has stated labor unions and higher wages cause unemployment, as well as stating labor unions create a stable middle class, and lower wages have a contractionary effect on the economy (which is characterized in part by unemployment). He has argued that governments do not cause recessions and are not responsible for business cycles, but he also blames the Bush administration for the current recession. Krugman claimed that nothing the government has done has had an impact on the economy, and states that government actions are like using a water pistol to shoot an elephant -- but he also claims that "big government" saved the economy. He declared that workers' fears of losing jobs to workers in China and India due to globalization aren't irrational, when he earlier stated that those who blamed the global economy for the loss of jobs were "silly."
In popular culture
Krugman appears as himself in a cameo in the 2010 comedy film
Get Him to the Greek. In the
Loudon Wainwright III song "The Krugman Blues" on the 2010 album
10 Songs for the New Depression, Wainwright describes reading Krugman's articles in
The New York Times.
Published works
Academic books (authored or coauthored)
The Spatial Economy – Cities, Regions and International Trade (July 1999), with Masahisa Fujita and Anthony Venables. MIT Press, ISBN 0-262-06204-6 The Self Organizing Economy (February 1996), ISBN 1-55786-698-8 EMU and the Regions (December 1995), with Guillermo de la Dehesa. ISBN 1-56708-038-3 Development, Geography, and Economic Theory (Ohlin Lectures) (September 1995), ISBN 0-262-11203-5 Foreign Direct Investment in the United States (3rd Edition) (February 1995), with Edward M. Graham. ISBN 0-88132-204-0 World Savings Shortage (September 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) ISBN 0-88165-097-8 Currencies and Crises (June 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), with Guillermo de la Dehesa and Charles Taylor. ISBN 1-56708-073-1 Has the Adjustment Process Worked? (Policy Analyses in International Economics, 34) (June 1991), ISBN 0-88132-116-8 Rethinking International Trade (April 1990), ISBN 0-262-11148-9 Trade Policy and Market Structure (March 1989), with Elhanan Helpman. ISBN 0-262-08182-2 Exchange-Rate Instability (Lionel Robbins Lectures) (November 1988), ISBN 0-262-11140-3 Adjustment in the World Economy (August 1987) ISBN 1-56708-023-5 Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1985), with Elhanan Helpman. ISBN 0-262-08150-4 Academic books (edited or coedited)
Currency Crises (National Bureau of Economic Research Conference Report) (September 2000), ISBN 0-226-45462-2 Trade with Japan : Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1995), ISBN 0-226-45459-2 Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April 1994), co-edited with Alasdair Smith. ISBN 0-226-45460-6 Exchange Rate Targets and Currency Bands (October 1991), co-edited with Marcus Miller. ISBN 0-521-41533-0 Strategic Trade Policy and the New International Economics (January 1986), ISBN 0-262-11112-8 Economics textbooks
Economics: European Edition (Spring 2007), with Robin Wells and Kathryn Graddy. ISBN 0-7167-9956-1 Macroeconomics (February 2006), with Robin Wells. ISBN 0-7167-6763-5 Economics, first edition (December 2005), with Robin Wells. ISBN 1-57259-150-1 Economics, second edition (2009), with Robin Wells. ISBN 0-7167-7158-6 Microeconomics (March 2004), with Robin Wells. ISBN 0-7167-5997-7 International Economics: Theory and Policy, with Maurice Obstfeld. 7th Edition (2006), ISBN 0-321-29383-5; 1st Edition (1998), ISBN 0-673-52186-9 Books for a general audience
End This Depression Now! (April 2012) ISBN 0-393-08877-4 *A call for stimulative expansionary policy and an end to austerity The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0-393-07101-4 *An updated version of his previous work. The Conscience of a Liberal (October 2007) ISBN 0-393-06069-1 The Great Unraveling: Losing Our Way in the New Century (September 2003) ISBN 0-393-05850-6 *A book of his The New York Times columns, many deal with the economic policies of the Bush administration or the economy in general. Fuzzy Math: The Essential Guide to the Bush Tax Plan (May 4, 2001) ISBN 0-393-05062-9 The Return of Depression Economics (May 1999) ISBN 0-393-04839-X *Considers the long economic stagnation of Japan through the 1990s, the Asian financial crisis, and problems in Latin America. * The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0-393-07101-4 The Accidental Theorist and Other Dispatches from the Dismal Science (May 1998) ISBN 0-393-04638-9 *Essay collection, primarily from Krugman's writing for Slate. Pop Internationalism (March 1996) ISBN 0-262-11210-8 *Essay collection, covering largely the same ground as Peddling Prosperity. Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations (April 1995) ISBN 0-393-31292-5 *History of economic thought from the first rumblings of revolt against Keynesian economics to the present, for the layman. The Age of Diminished Expectations: U.S. Economic Policy in the 1990s (1990) ISBN 0-262-11156-X * A "briefing book" on the major policy issues around the economy. * Revised and Updated, January 1994, ISBN 0-262-61092-2 * Third Edition, August 1997, ISBN 0-262-11224-8 Selected academic articles
(1998) 'It's Baaack: Japan's Slump and the Return of the Liquidity Trap' Brookings Papers on Economic Activity 1998, pp. 137–205. (1996) 'Are currency crises self-fulfilling?' NBER Macroeconomics Annual 11, pp. 345–78. (1995)
(1991) 'Increasing returns and economic geography'. Journal of Political Economy 99, pp. 483–99. (1991)
(1991) 'History versus expectations'. Quarterly Journal of Economics 106 (2), pp. 651–67. (1981) 'Intra-industry specialization and the gains from trade'. Journal of Political Economy 89, pp. 959–73. (1980) 'Scale economies, product differentiation, and the pattern of trade'. American Economic Review 70, pp. 950–59. (1979) 'A model of balance-of-payments crises'. Journal of Money, Credit, and Banking 11, pp. 311–25. (1979) 'Increasing returns, monopolistic competition, and international trade'. Journal of International Economics 9, pp. 469–79. See also
Capitol Hill Baby-Sitting Co-op, popularized in Krugman's book, Peddling Prosperity List of economists List of Jewish Nobel laureates List of newspaper columnists References
External links
Profile and column archive at The New York Times * The Conscience of a Liberal blog KrugmanOnline.com features books by Paul Krugman, a custom search engine, and aggregated content from the web. The Unofficial Paul Krugman Archive contains nearly all his pre-Times Select articles Paul Krugman (MIT) archives of his Slate and Fortune columns plus other writings 1996-2000 The Increasing Returns Revolution in Trade and Geography 2008 lecture at NobelPrize.org Profile and Papers at Research Papers in Economics/RePEc Publications at the National Bureau of Economic Research Video: Open Mind Interview, 2002: Part One, 2002,Part Two 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 - September 2007 Video: The Conscience of a Liberal (November 3, 2007) - lecture from Mr. Krugman's 2007 book tour. Video of debate/discussion with Paul Krugman and Mario Cuomo on Bloggingheads.tv How Paul Krugman Found Politics, Larissa MacFarquhar, The New Yorker, March 1, 2010 Paul Krugman's video interview on Big Think Paul Krugman: Doctor honoris causa by three Portuguese universities – Portugal - Portuguese American Journal Category:1953 births Category:Academics of the London School of Economics Category:American bloggers Category:American columnists Category:American economists Category:20th-century economists Category:American essayists Category:American foreign policy writers Category:American Nobel laureates Category:American people of Belarusian-Jewish descent Category:Enron Category:Fellows of the American Academy of Arts and Sciences Category:Fellows of the Econometric Society Category:Jewish American social scientists Category:Living people Category:Massachusetts Institute of Technology alumni Category:Keynesians Category:The New York Times columnists Category:Nobel laureates in Economics Category:People from Nassau County, New York Category:Princeton University faculty Category:Trade economists Category:United States Council of Economic Advisers Category:Yale University alumni
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