New Keynesian economics Wikipedia
New Keynesian economics is a school of contemporary macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of New Classical macroeconomics.
Two main assumptions define the New Keynesian approach to macroeconomics. Like the New Classical approach, New Keynesian macroeconomic analysis usually assumes that households and firms have rational expectations. But the two schools differ in that New Keynesian analysis usually assumes a variety of market failures. In particular, New Keynesians assume prices and wages are "sticky", which means they do not adjust instantaneously to changes in economic conditions.
Wage and price stickiness, and the other market failures present in New Keynesian models, imply that the economy may fail to attain full employment. Therefore, New Keynesians argue that macroeconomic stabilization by the government (using fiscal policy) or by the central bank (using monetary policy) can lead to a more efficient macroeconomic outcome than a laissez faire policy would.
Significant early contributions to New Keynesian theory were compiled in 1991 by editors N. Gregory Mankiw and David Romer in New Keynesian Economics, volumes 1 and 2.[1] The papers in these volumes focused mostly on microfoundations, that is, microeconomic ingredients that could produce Keynesian macroeconomic effects, and did not yet attempt to construct complete macroeconomic models.
More recently, macroeconomists have begun to build dynamic stochastic general equilibrium (DSGE) models with Keynesian features. The New Keynesian DSGE modeling methodology is explained in Michael Woodford's textbook Interest and Prices: Foundations of a Theory of Monetary Policy.[2] Economists are now actively estimating quantitative models of this type,[3][4] and using them to analyze optimal monetary and fiscal policy.
[edit] Microfoundations of price stickiness
'Nominal rigidities', that is, sticky prices and wages, are a central aspect of all New Keynesian models. Why should prices adjust slowly? One common explanation given by New Keynesians is the presence of 'menu costs', meaning small costs that must be paid in order to adjust nominal prices. For example, the costs of making a new catalog, price list, or menu would be considered menu costs. Even though these costs seem small, New Keynesians explain how they could amplify short-run fluctuations. Not only do the firms have to pay to change the price, but also, according to N. Gregory Mankiw, there are also externalities that go along with changing prices.[5] As Mankiw describes, a firm that lowers its prices because of a decrease in the money supply will be raising the real income of the customers of that product. This will allow the buyers to purchase more, which will not necessarily be from the firm that lowered their prices. As firms do not receive the full benefit from reducing their prices their incentive to adjust prices in response to macroeconomic events is reduced.
Recent studies (e.g. Golosov and Lucas)[6] find that the size of the menu cost needed to match the micro-data of price adjustment inside an otherwise standard business cycle model is implausibily large to justify the menu-cost argument. The reason is that such models lack "real rigidity" (see Ball and Romer). This is a property that markups do not get squeezed by large adjustment in factor prices (such as wages) that could occur in response to the monetary shock. Modern New Keynesian models address this issue by assuming that the labor market is segmented, so that the expansion in employment by a given firm does not lead to lower profits for the other firms (see Woodford 2003).
[edit] Other microeconomic ingredients
Besides sticky prices, another market imperfection built into most New Keynesian models is the assumption that firms are monopolistic competitors.[7] In fact, without some monopoly power it would make no sense to assume sticky prices, because under perfect competition, any firm with a price slightly higher than the others would be unable to sell anything, and any firm with a price slightly lower than the others would be obliged to sell much more than they can profitably produce. Therefore, New Keynesian models assume instead that firms use their market power to maintain their prices above marginal cost, so that even if they fail to set prices optimally they will remain profitable. Many macroeconomic studies have estimated typical firms' degree of market power, so this information can be used in parameterizing New Keynesian models.
Other microeconomic elements that appear in some New Keynesian models (though not so commonly as sticky prices and imperfect competition) include the following.
Credit market imperfections[8][9]
Coordination failures, leading to aggregate demand multipliers and possible multiplicity of equilibrium[10]
Unemployment caused by moral hazard problems,[11] or unemployment caused by matching frictions[12]
[edit] New Keynesian DSGE models
After the pioneering work, surveyed in the Mankiw and Romer volumes, on what types of microeconomic ingredients might produce Keynesian macroeconomic effects, economists began putting these pieces together to construct macroeconomic models. These models describe the decisions of households, monopolistically competitive firms, the government or central bank, and sometimes other economic agents. The monopolistic firms are assumed to face some type of price stickiness, so each time firms adjust their prices, they must bear in mind that those prices are likely to remain fixed longer than they would like. Many models assume wages are rigid too. Total output is determined by households' purchases, which depend on the prices of the firms. Since macroeconomic behavior is derived from the interaction of the decisions of all these players, acting over time, in the face of uncertainty about future conditions, these models are classified as dynamic stochastic general equilibrium (DSGE) models. The parameters of the model are usually estimated or chosen to make the model's dynamics resemble the actual macroeconomic data from the country or region under study. This modeling methodology is surveyed in Woodford (2003), op. cit.
[edit] Policy implications
New Keynesian economists fully agree with New Classical economists that in the long run, changes in the money supply are neutral. However, because prices are sticky in the New Keynesian model, an increase in the money supply (or equivalently, a decrease in the interest rate) does increase output and lower unemployment in the short run.
Nonetheless, New Keynesian economists do not advocate using expansive monetary policy just for short run gains in output and employment, because doing so would raise inflationary expectations and thus store up problems for the future. Instead, they advocate using monetary policy for stabilization. That is, suddenly increasing the money supply just to produce a temporary economic boom is a bad idea (because eliminating the increased inflationary expectations will be impossible without producing a recession). But when the economy is hit by some unexpected external shock, it may be a good idea to offset the macroeconomic effects of the shock with monetary policy. This is especially true if the unexpected shock is one (like a fall in consumer confidence) which tends to lower both output and inflation; in that case, expanding the money supply (lowering interest rates) helps by increasing output while stabilizing inflation and inflationary expectations.
Studies of optimal monetary policy in New Keynesian DSGE models have focused on interest rate rules (especially 'Taylor rules'), specifying how the central bank should adjust the nominal interest rate in response to changes in inflation and output. (More precisely, optimal rules usually react to changes in the output gap, rather than changes in output per se.) In some simple New Keynesian DSGE models, it turns out that stabilizing inflation suffices, because maintaining perfectly stable inflation also stabilizes output and employment to the maximum degree desirable. Blanchard and Galí have called this property the 'divine coincidence'.[13] However, they also show that in models with more than one market imperfection (for example, frictions in adjusting the employment level, as well as sticky prices), there is no longer a 'divine coincidence', and instead there is a tradeoff between stabilizing inflation and stabilizing employment.[12]
[edit] Relation to other macroeconomic schools
Over the years, a sequence of 'new' macroeconomic theories related to or opposed to Keynesianism have been influential.[14] After World War II, Paul Samuelson used the term neoclassical synthesis to refer to the integration of Keynesian economics with neoclassical economics. The idea was that the government and the central bank would maintain rough full employment, so that neoclassical notions—centered on the axiom of the universality of scarcity—would apply. John Hicks' IS/LM model was central to the neoclassical synthesis.
Later work by economists such as James Tobin and Franco Modigliani involving more emphasis on the microfoundations of consumption and investment was sometimes called neo-Keynesianism. It is often contrasted with the post-Keynesianism of Paul Davidson, which emphasizes the role of fundamental uncertainty in economic life, especially concerning issues of private fixed investment.
New Keynesianism, associated with John B. Taylor, Gregory Mankiw, David Romer, Olivier Blanchard, Nobuhiro Kiyotaki, Jordi Galí, and Michael Woodford, is a response to Robert Lucas and the new classical school. That school criticized the inconsistencies of Keynesianism in the light of the concept of "rational expectations." The new classicals combined a unique market-clearing equilibrium (at full employment) with rational expectations. The New Keynesians use "microfoundations" to demonstrate that price stickiness hinders markets from clearing. Thus, the rational expectations-based critique does not apply.
Whereas the neoclassical synthesis hoped that fiscal and monetary policy would maintain full employment, the new classicals assumed that price and wage adjustment would automatically attain this situation in the short run. The new Keynesians, on the other hand, see full employment as being automatically achieved only in the long run, since prices are "sticky" in the short run. Government and central-bank policies are needed because the "long run" may be very long.
Emphasis has also been placed during the 2008 global financial and economic crisis on Keynes' stress on the importance of coordination of macroeconomic policies (e.g. monetary and fiscal stimulus) and of international economic institutions such as the World Bank and IMF, and of the maintenance of an open trading system. This has been reflected in the work of IMF economists[15] and of Donald Markwell[16
Significant early contributions to New Keynesian theory were compiled in 1991 by editors N. Gregory Mankiw and David Romer in New Keynesian Economics, volumes 1 and 2.[1] The papers in these volumes focused mostly on microfoundations, that is, microeconomic ingredients that could produce Keynesian macroeconomic effects, and did not yet attempt to construct complete macroeconomic models.
More recently, macroeconomists have begun to build dynamic stochastic general equilibrium (DSGE) models with Keynesian features. The New Keynesian DSGE modeling methodology is explained in Michael Woodford's textbook Interest and Prices: Foundations of a Theory of Monetary Policy.[2] Economists are now actively estimating quantitative models of this type,[3][4] and using them to analyze optimal monetary and fiscal policy.
[edit] Microfoundations of price stickiness
'Nominal rigidities', that is, sticky prices and wages, are a central aspect of all New Keynesian models. Why should prices adjust slowly? One common explanation given by New Keynesians is the presence of 'menu costs', meaning small costs that must be paid in order to adjust nominal prices. For example, the costs of making a new catalog, price list, or menu would be considered menu costs. Even though these costs seem small, New Keynesians explain how they could amplify short-run fluctuations. Not only do the firms have to pay to change the price, but also, according to N. Gregory Mankiw, there are also externalities that go along with changing prices.[5] As Mankiw describes, a firm that lowers its prices because of a decrease in the money supply will be raising the real income of the customers of that product. This will allow the buyers to purchase more, which will not necessarily be from the firm that lowered their prices. As firms do not receive the full benefit from reducing their prices their incentive to adjust prices in response to macroeconomic events is reduced.
Recent studies (e.g. Golosov and Lucas)[6] find that the size of the menu cost needed to match the micro-data of price adjustment inside an otherwise standard business cycle model is implausibily large to justify the menu-cost argument. The reason is that such models lack "real rigidity" (see Ball and Romer). This is a property that markups do not get squeezed by large adjustment in factor prices (such as wages) that could occur in response to the monetary shock. Modern New Keynesian models address this issue by assuming that the labor market is segmented, so that the expansion in employment by a given firm does not lead to lower profits for the other firms (see Woodford 2003).
[edit] Other microeconomic ingredients
Besides sticky prices, another market imperfection built into most New Keynesian models is the assumption that firms are monopolistic competitors.[7] In fact, without some monopoly power it would make no sense to assume sticky prices, because under perfect competition, any firm with a price slightly higher than the others would be unable to sell anything, and any firm with a price slightly lower than the others would be obliged to sell much more than they can profitably produce. Therefore, New Keynesian models assume instead that firms use their market power to maintain their prices above marginal cost, so that even if they fail to set prices optimally they will remain profitable. Many macroeconomic studies have estimated typical firms' degree of market power, so this information can be used in parameterizing New Keynesian models.
Other microeconomic elements that appear in some New Keynesian models (though not so commonly as sticky prices and imperfect competition) include the following.
Credit market imperfections[8][9]
Coordination failures, leading to aggregate demand multipliers and possible multiplicity of equilibrium[10]
Unemployment caused by moral hazard problems,[11] or unemployment caused by matching frictions[12]
[edit] New Keynesian DSGE models
After the pioneering work, surveyed in the Mankiw and Romer volumes, on what types of microeconomic ingredients might produce Keynesian macroeconomic effects, economists began putting these pieces together to construct macroeconomic models. These models describe the decisions of households, monopolistically competitive firms, the government or central bank, and sometimes other economic agents. The monopolistic firms are assumed to face some type of price stickiness, so each time firms adjust their prices, they must bear in mind that those prices are likely to remain fixed longer than they would like. Many models assume wages are rigid too. Total output is determined by households' purchases, which depend on the prices of the firms. Since macroeconomic behavior is derived from the interaction of the decisions of all these players, acting over time, in the face of uncertainty about future conditions, these models are classified as dynamic stochastic general equilibrium (DSGE) models. The parameters of the model are usually estimated or chosen to make the model's dynamics resemble the actual macroeconomic data from the country or region under study. This modeling methodology is surveyed in Woodford (2003), op. cit.
[edit] Policy implications
New Keynesian economists fully agree with New Classical economists that in the long run, changes in the money supply are neutral. However, because prices are sticky in the New Keynesian model, an increase in the money supply (or equivalently, a decrease in the interest rate) does increase output and lower unemployment in the short run.
Nonetheless, New Keynesian economists do not advocate using expansive monetary policy just for short run gains in output and employment, because doing so would raise inflationary expectations and thus store up problems for the future. Instead, they advocate using monetary policy for stabilization. That is, suddenly increasing the money supply just to produce a temporary economic boom is a bad idea (because eliminating the increased inflationary expectations will be impossible without producing a recession). But when the economy is hit by some unexpected external shock, it may be a good idea to offset the macroeconomic effects of the shock with monetary policy. This is especially true if the unexpected shock is one (like a fall in consumer confidence) which tends to lower both output and inflation; in that case, expanding the money supply (lowering interest rates) helps by increasing output while stabilizing inflation and inflationary expectations.
Studies of optimal monetary policy in New Keynesian DSGE models have focused on interest rate rules (especially 'Taylor rules'), specifying how the central bank should adjust the nominal interest rate in response to changes in inflation and output. (More precisely, optimal rules usually react to changes in the output gap, rather than changes in output per se.) In some simple New Keynesian DSGE models, it turns out that stabilizing inflation suffices, because maintaining perfectly stable inflation also stabilizes output and employment to the maximum degree desirable. Blanchard and Galí have called this property the 'divine coincidence'.[13] However, they also show that in models with more than one market imperfection (for example, frictions in adjusting the employment level, as well as sticky prices), there is no longer a 'divine coincidence', and instead there is a tradeoff between stabilizing inflation and stabilizing employment.[12]
[edit] Relation to other macroeconomic schools
Over the years, a sequence of 'new' macroeconomic theories related to or opposed to Keynesianism have been influential.[14] After World War II, Paul Samuelson used the term neoclassical synthesis to refer to the integration of Keynesian economics with neoclassical economics. The idea was that the government and the central bank would maintain rough full employment, so that neoclassical notions—centered on the axiom of the universality of scarcity—would apply. John Hicks' IS/LM model was central to the neoclassical synthesis.
Later work by economists such as James Tobin and Franco Modigliani involving more emphasis on the microfoundations of consumption and investment was sometimes called neo-Keynesianism. It is often contrasted with the post-Keynesianism of Paul Davidson, which emphasizes the role of fundamental uncertainty in economic life, especially concerning issues of private fixed investment.
New Keynesianism, associated with John B. Taylor, Gregory Mankiw, David Romer, Olivier Blanchard, Nobuhiro Kiyotaki, Jordi Galí, and Michael Woodford, is a response to Robert Lucas and the new classical school. That school criticized the inconsistencies of Keynesianism in the light of the concept of "rational expectations." The new classicals combined a unique market-clearing equilibrium (at full employment) with rational expectations. The New Keynesians use "microfoundations" to demonstrate that price stickiness hinders markets from clearing. Thus, the rational expectations-based critique does not apply.
Whereas the neoclassical synthesis hoped that fiscal and monetary policy would maintain full employment, the new classicals assumed that price and wage adjustment would automatically attain this situation in the short run. The new Keynesians, on the other hand, see full employment as being automatically achieved only in the long run, since prices are "sticky" in the short run. Government and central-bank policies are needed because the "long run" may be very long.
Emphasis has also been placed during the 2008 global financial and economic crisis on Keynes' stress on the importance of coordination of macroeconomic policies (e.g. monetary and fiscal stimulus) and of international economic institutions such as the World Bank and IMF, and of the maintenance of an open trading system. This has been reflected in the work of IMF economists[15] and of Donald Markwell[16
http://en.wikipedia.org/wiki/New_Keynesian_economics
Thursday, November 19, 2009
John Kenneth Galbraith Economics
From Wikipedia, the free encyclopedia
John Kenneth "Ken" Galbraith, OC (October 15, 1908 – April 29, 2006) was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism and progressivism. His books on economic topics were bestsellers from the 1950s through the 1970s and he filled the role of public intellectual in this period on matters of economics.
Galbraith was a prolific author who produced four dozen books and over a thousand articles on various subjects. Among his most famous works was a popular trilogy on economics, American Capitalism (1952), The Affluent Society (1958), and The New Industrial State (1967). He taught at Harvard University for many years. Galbraith was active in politics, serving in the administrations of Franklin D. Roosevelt, Harry S. Truman, John F. Kennedy and Lyndon B. Johnson; and among other roles served as United States Ambassador to India under Kennedy.
He was one of the few honorees who received the Presidential Medal of Freedom twice. He received one in 1946 from President Truman and another in 2000 from President Bill Clinton.[1] He was also awarded the Order of Canada in 1997[2] and, in 2001, the Padma Vibhushan, India's second highest civilian award, for his contributions to strengthening ties between India and the United States.[3]
Early life and teaching
Galbraith was born to Canadians of Scottish descent, Archibald "Archie" Galbraith and Sarah Catherine Kendall, in Iona Station, Ontario, Canada, and was raised in Dunwich Township, Ontario. He had three siblings: Alice, Catherine and Archibald William (Bill). His early school years were spent at a one room school on Willy's Sideroad, which is still standing. The family farm is on Thomson Line. He went to school at Dutton High School. His father was a farmer and school teacher; his mother, a political activist. By the time he was a teenager, he had adopted the name Ken, and later disliked being called John.[4] Both his parents were supporters of the United Farmers of Ontario in the 1920s. After initially studying agriculture, Galbraith graduated from the Ontario Agricultural College (then affiliated with the University of Toronto, and now the University of Guelph) with a B.Sc degree in 1931, and then received an M.Sc (1933) and Ph.D in Agricultural Economics (1934) from the University of California, Berkeley. In 1934, he also became a tutor at Harvard University. In 1937, he became a United States citizen, at a time when the USA did not contemplate dual citizenship and Canada did not yet have a Citizenship Act, Canadians then being "British Subjects." By the 1980s and '90s respectively, the USA and Canada acknowledged that their citizens who had taken out citizenship in the others' countries were recognized as having also retained their original citizenship and Professor Galbraith died as he had been born - a Canadian, though he had previously already been amply honoured as a Canadian as well as American. In the same year, he took a year-long fellowship at Cambridge University, England, where he became influenced by John Maynard Keynes, then traveled in Europe for several months in 1938, attending an international economic conference and developing his ideas. Galbraith was a very tall man, growing to a reported height of 6'9" [206 cm].
Galbraith taught intermittently at Harvard in the period 1934 to 1939.[5] From 1939 to 1940, he taught at Princeton University. From 1943 until 1948, he served as editor of Fortune magazine. In 1949, he was appointed professor of economics at Harvard.
[edit] World War II and Price Administration
During World War II, Galbraith, charged with keeping inflation from crippling the war effort, served as deputy head of the Office of Price Administration. Because wartime production needs mandated large budget deficits and an accommodative monetary policy, the outbreak of inflation and a runaway wage-price spiral was seen as a very real possibility. In 1942, Roosevelt issued a General Maximum Price Regulation, followed a year later by a "Hold the Line Order" which froze prices and gave the OPE power to keep prices in check. The OPA itself - through its Consumer Division - mobilized the public on behalf of these guidelines, reducing the likelihood of "cheating" by those who would seek higher wages or prices. The result was that wages and prices were kept in check, and the U.S. enjoyed rapid growth and price stability through the war.
Although little appreciated at the time, the actual power Galbraith wielded in this position was so great that he joked later that the rest of his career had been downhill. Indeed, congressional and business backlash against the OPA meant that Galbraith would be forced out in 1943, eventually replaced by advertising executive Samuel Bowles.
At the end of the war, Galbraith was asked to be one of the leaders of the Strategic Bombing Surveys of both Europe and Japan. He also became an adviser to post-war administrations in Germany and Japan.
[edit] Political posts under Kennedy
Galbraith, far left, as US ambassador to India, 1961During his time as an adviser to President John F. Kennedy, Galbraith was appointed as United States Ambassador to India from 1961 to 1963. His rapport with President Kennedy was such that he regularly bypassed the State Department and sent his diplomatic cables directly to the President.[6] In India, he became an intimate of Prime Minister Jawaharlal Nehru, and extensively advised the Indian government on economic matters; he harshly criticised Louis Mountbatten, the last Viceroy of British rule, for Mountbatten's passive role in the Partition of India in 1947 and the bloody partition of the Punjab and Bengal. While in India, he helped establish one of the first computer science departments, at the Indian Institute of Technology in Kanpur, Uttar Pradesh. Even after leaving office, Galbraith remained a friend and supporter of India and hosted a lunch for Indian students at Harvard every year on graduation day.
Because of his recommendation, First Lady of the United States Jacqueline Bouvier Kennedy undertook her diplomatic missions in India and Pakistan.
[edit] Family
Galbraith married Catherine Merriam Atwater on September 17, 1937, whom he met while she was a Radcliffe student. They resided in Cambridge, Massachusetts, and had a summer home in Newfane, Vermont. They had four sons: J. Alan Galbraith is a partner in the prominent Washington D.C. law firm Williams & Connolly; Douglas Galbraith died in childhood of leukemia; Peter W. Galbraith has been a US diplomat who served as Ambassador to Croatia and is a widely published commentator on American foreign policy - particularly in the Balkans and the Middle East; James K. Galbraith is a prominent progressive economist at the University of Texas Lyndon B. Johnson School of Public Affairs. The Galbraiths also have ten grandchildren. [2]
[edit] Later life and recognition
In 1972 he served as president of the American Economic Association.[7] The Journal of Post Keynesian Economics benefited from Galbraith's support, and he served as the chairman of its board from its beginning.[4] In 1985, the American Humanist Association named him the Humanist of the Year. In 1997 he was made an Officer of the Order of Canada[8] and in 2000 he was awarded his second U. S. Presidential Medal of Freedom. He was also awarded an honorary doctorate from Memorial University of Newfoundland at the fall convocation of 1999.[9] He was also awarded in 2000 with the Leontief Prize for his outstanding contribution to economic theory by the Global Development and Environment Institute. The library in his home town Dutton, Ontario was renamed the John Kenneth Galbraith Reference Library in honor of his attachment to the library and his contributions to the new building.
On April 29, 2006, Galbraith died in Cambridge, Massachusetts of natural causes, after a two-week stay in a hospital.
Works
Although he was a president of the American Economic Association, Galbraith was considered an iconoclast by many economists. This is because he rejected the technical analyses and mathematical models of neoclassical economics as being divorced from reality. Rather, following Thorstein Veblen, he believed that economic activity could not be distilled into inviolable laws, but rather was a complex product of the cultural and political milieu in which it occurs. In particular, he believed that important factors such as advertising, the separation between corporate ownership and management, oligopoly, and the influence of government and military spending had been largely neglected by most economists because they are not amenable to axiomatic descriptions. In this sense, he worked as much in political economy as in classical economics.
His work included several best selling works throughout the fifties and sixties. After his retirement, he remained in the public consciousness by continuing to write new books and revise his old works as well as presenting a major series on economics for BBC television in 1977 "The Age of Uncertainty".[26] While some considered his views anachronistic during the pro-market, small-government, anti-regulation and low-tax orthodoxies which came to prominence in the 1980s, the downfall of those ideas' popularity with the late 2000s economic crisis has awakened interest in his theories once again.
In addition to his books, he wrote hundreds of essays and a number of novels. Among his novels, A Tenured Professor achieved particular critical acclaim.
[edit] Economics books
Galbraith was an important figure in 20th century institutional economics, and provides perhaps the exemplar institutionalist perspective on Economic Power[27].
In American Capitalism: The Concept of Countervailing Power, published in 1952, Galbraith outlined how the American economy in the future would be managed by a triumvirate of big business, big labor, and an activist government. Galbraith termed the reaction of lobby groups and unions "countervailing power." He contrasted this arrangement with the previous pre-depression era where big business had relatively free rein over the economy.
His 1954 bestseller The Great Crash, 1929 describes the famous Wall Street melt down of stock prices and how markets progressively become decoupled from reality in a speculative boom. The book is also a platform for Galbraith's keen insights, and humour, into human behaviour when wealth is threatened. It has never been out of print.
The influence of the Wall St crash on the Great Depression
Contrary to what had been Wall Street's perceived tendency in playing down its influence, Galbraith asserted the important contribution of the 1929 crash on the Great Depression which followed:[15] causing a contraction of demand for goods, destroying for a time the normal means of investment and lending, arresting economic growth and causing financial hardship which alienated many from the economic system. [2] Galbraith further argues that the Great Depression was caused by a mixture of five main weaknesses: First, an imbalance in the income distribution. Galbraith asserts "that the 5 per cent of the population with the highest incomes in that year [1929] received approximately one third of all personal income". Personal income in the form of rents, dividends and interest of the well-to-do was approximately twice as much as the period following the Second World War, leaving the economy dependent on a high level of investment and, or, luxury consumer spending with its potential exposure to the Crash of 1929.[16]
Second, problems in the structure of corporations. Most specifically, he cites newly formed investment entities of the era (such as holding companies and investment trusts) as contributing to a deflationary spiral due in no small part to their high reliance on leverage. Dividends paid the interest on the bonds in the holding companies and when these were interrupted the structure collapsed. “It would be hard to imagine a corporate system better designed to continue and accentuate a deflationary cycle." Also “The fact was that American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors, and frauds. This, in the long history of such activities, was a kind of flood tide of corporate larceny.”[16]
Third, the bad banking structure. The weakness was manifest in the large number of units working independently. As one failed pressure was applied to another leading to a domino effect accelerated by increasing unemployment and lower incomes.[17]
Fourth, foreign trade imbalances. During World War I, the US became a creditor nation, exporting more than it imported. High tariffs on imports contributed to this imbalance. Subsequent defaults by foreign governments led to a decline in exports, which was especially hard on farmers.
And finally, "the poor state of economic intelligence". Galbraith says that the "economists and those who offered economic counsel in the late twenties and early thirties were almost uniquely perverse" and that reputable economic advice was invariably on the sides steps that made things worse".[18]
Prospects for recurrence
Galbraith was of the opinion that the Great Crash had burned itself so deeply into the national consciousness that America had been spared another bubble up to the present time (1954).[19]; however he thought the chances of another speculative orgy which characterized the 1929 crash as rather good as he felt the American people remained susceptible to the conviction that unlimited rewards were to be had and that they individually were meant to share in it. He considered the sense of responsibility in the financial community for the wider community as whole as not being small but "nearly nil".[20] Even though government powers were available to prevent a recurrence of a bubble their use was not attractive or politically expedient since an election is in the offing even on the day after an election.[21]
In his most famous work, The Affluent Society (1958), which also became a bestseller, Galbraith outlined his view that to become successful, post-World War II America should make large investments in items such as highways and education using funds from general taxation.
Galbraith also critiqued the assumption that continually increasing material production is a sign of economic and societal health. Because of this Galbraith is sometimes considered one of the first post-materialists. In this book, he coined and popularized the phrase "conventional wisdom".[28] Galbraith worked on the book while in Switzerland, and had originally titled it Why The Poor Are Poor but changed it to The Affluent Society at his wife's suggestion.[29] The Affluent Society contributed (likely to a significant degree, given that Galbraith had the ear of President Kennedy [30]) to the "war on poverty," the government spending policy first brought on by the administrations of Kennedy and Johnson.
In The New Industrial State (1967), Galbraith argues that very few industries in the United States fit the model of perfect competition. In The New Industrial State Galbraith expanded his analysis of the role of power in economic life. A central concept of the book is the revised sequence. The conventional wisdom in economic thought portrays economic life as a set of competitive markets governed ultimately by the decisions of sovereign consumers. In this original sequence, the control of the production process flows from consumers of commodities to the organizations that produce those commodities. In the revised sequence, this flow is reversed and businesses exercise control over consumers by advertising and related salesmanship activities.
The revised sequence concept applies only to the industrial system - that is, the manufacturing core of the economy in which each industry contains only a handful of very powerful corporations. It does not apply to the market system in the Galbraithian dual economy. In the market system, composed of the vast majority of business organizations, price competition remains the dominant form of social control. In the industrial system, however, composed of the 1,000 or so largest corporations, competitive price theory obscures the relation to the price system of these large and powerful corporations. In Galbraith's view, the principal function of market relations in this industrial system is not to constrain the power of the corporate behemoths but to serve as an instrument for the implementation of their power. Moreover, the power of these corporations extends into commercial culture and politics, allowing them to exercise considerable influence upon popular social attitudes and value judgments. That this power is exercised in the shortsighted interest of expanding commodity production and the status of the few is both inconsistent with democracy and a barrier to achieving the quality of life which the new industrial state with its affluence could provide.
The New Industrial State not only provided Galbraith with another best-selling book, it also extended once again the currency of Institutionalist economic thought. The book also filled a very pressing need in the late 1960s. The conventional theory of monopoly power in economic life maintains that the monopolist will attempt to restrict supply in order to maintain price above its competitive level. The social cost of this monopoly power is a decrease in both allocative efficiency and the equity of income distribution. This conventional economic analysis of the role of monopoly power did not adequately address popular concern about the large corporation in the late 1960s. The growing concern focused on the role of the corporation in politics, the damage done to the natural environment by an unmitigated commitment to economic growth, and the perversion of advertising and other pecuniary aspects of culture. The New Industrial State gave a plausible explanation of the power structure involved in generating these problems and thus found a very receptive audience among the rising American counterculture and political activists.
A third related work was Economics and the Public Purpose (1973), in which he expanded on these themes by discussing, among other issues, the subservient role of women in the unrewarded management of ever-greater consumption, and the role of the technostructure in the large firm in influencing perceptions of sound economic policy aims.
In A Short History of Financial Euphoria (1994), he traces speculative bubbles through several centuries, and argues that they are inherent in the economic system because of "mass psychology" and the "vested interest in error that accompanies speculative euphoria." Also, financial memory is "notoriously short": what currently seems to be a "new financial instrument" is inevitably nothing of the sort. Galbraith cautions: "The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version." Crucial to his analysis is the assertion that the common factor in boom and bust is the creation of debt to finance speculation, which "becomes dangerously out of scale in relation to the underlying means of payment".
Galbraith cherished The New Industrial State and The Affluent Society as his two best.[31] Economist and friend of Galbraith Michael Sharpe visited Galbraith in 2004, on which occasion Galbraith gifted him with a copy of what would be Galbraith's last book, The Economics of Innocent Fraud. Galbraith confided in Sharpe that "[t]his is my best book", an assertion Galbraith delivered "a little mischievously." [32]
[edit] Some of Galbraith's Ideas
Galbraith's main ideas focused around the influence of the market power of large corporations.[4] He believed that this market power weakened the widely-accepted principle of consumer sovereignty, allowing corporations to be price makers, rather than price takers,[33] allowing corporations with the strongest market power to increase the production of their goods beyond an efficient amount. He further believed that market power played a major role in inflation[4] and argued that corporations and trade unions could only increase prices to the extent that their market power allowed them to. He argued that in situations of excessive market power, price controls effectively controlled inflation, but cautioned against using them in markets that were basically efficient such as agricultural goods and housing.[34] He noted that price controls were much easier to enforce in industries with relatively few buyers and sellers.[34]:244 Galbraith's view of market power was not entirely negative; he also noted that the power of US firms played a part in the success of the US economy.
In The Affluent Society Galbraith asserts that classical economic theory was true for the eras before the present, which were times of "poverty"; now, however, we have moved from an age of poverty to an age of "affluence," and for such an age, a completely new economic theory is needed. Galbraith's main argument is that as society becomes relatively more affluent, so private business must "create" consumer wants through advertising, and while this generates artificial affluence through the production of commercial goods and services, the public sector becomes neglected. He points out that while many Americans were able to purchase luxury items, their parks were polluted and their children attended poorly maintained schools. He argues that markets alone will underprovide (or fail to provide at all) for many public goods, whereas private goods are typically 'overprovided' due to the process of advertising creating an artificial demand above the individual's basic needs. This emphasis on the power of advertising and consequent overconsumption may have anticipated the drop in savings rates in the USA and elsewhere in the developing world.[4]
Galbraith proposed curbing the consumption of certain products through greater use of consumption taxes, arguing that this could be more efficient than other forms of taxation, such as labour or land taxes. Galbraith's major proposal was a program he called "investment in men" — a large-scale publicly-funded education program aimed at empowering ordinary citizens. Galbraith wished to entrust citizens with the future of the American republic.
Volume 20, issue 4 of the Review of Political Economy was dedicated to John Kenneth Galbraith's ideas.
[edit] Criticism of Galbraith's Work
Galbraith's work, in general, and The Affluent Society, in particular, have drawn sharp criticism from free-market supporters at the time of its publication. Monetarist Milton Friedman in "Friedman on Galbraith, and on curing the British disease" views Galbraith as a 20th century version of the early 19th century Tory radical of Great Britain. He asserts that Galbraith believes in the superiority of aristocracy and in its paternalistic authority, that consumers should not be allowed choice and that all should be determined by those with "higher minds":
Many reformers – Galbraith is not alone in this – have as their basic objection to a free market that it frustrates them in achieving their reforms, because it enables people to have what they want, not what the reformers want. Hence every reformer has a strong tendency to be averse to a free market.
Richard Parker, in his biography John Kenneth Galbraith: His Life, His Economics, His Politics, characterizes Galbraith as more complex. Galbraith's primary purpose in Capitalism: The Concept of Countervailing Power (1952) was, ironically, to show that big business was now necessary to the American economy to maintain the technological progress that drives economic growth. However, Galbraith saw the necessity of "countervailing power," not only including government regulation and oversight, but also collective bargaining, and the suasion that large retailers and distributors could bring to bear on large producers and suppliers. In The New Industrial State (1967), Galbraith argued that the dominant American corporations had created a technostructure that closely controlled both consumer demand and market growth through advertising and marketing. While Galbraith defended government intervention, Parker notes that he also believed that government and big business worked together to maintain stability.[35]
Paul Krugman, the influential, Nobel Prize–winning Princeton University professor and New York Times op-ed columnist, has denigrated Galbraith's stature as an economist. In Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations, he calls Galbraith a "policy entrepreneur" – an economist who writes solely for the public, as opposed to one who writes for other professors, and who therefore makes unwarranted diagnoses and offers over-simplistic answers to complex economic problems. He asserts that Galbraith was never taken seriously by fellow academics, who viewed him as more of a "media personality". For example, Krugman believes that Galbraith's work The New Industrial State is not considered to be "real economic theory", and that Economics in Perspective is "remarkably ill-informed".[36] However, acknowledging the alleged damage caused by the George W. Bush administration, Krugman now says of his polemics in the 1990s, “I was wrong obviously. If I’d understood where politics would be now, it would have been quite different.”[37]
Describing the reception of Galbraith's lectures by students at Harvard, Thomas Sowell coined the term "the Galbraith Effect":
“On the first day of class, Professor Galbraith gave a brilliant opening lecture, after which the students gave him a standing ovation. Galbraith kept on giving brilliant opening lectures the whole semester. But, instead of standing ovations, there were now dwindling numbers of students and some of them got up and walked out in the middle of his lectures. Galbraith never got beyond the glittering generalities that marked his first lecture. After a while, the students got tired of not getting any real substance.” [38]
[edit] Memoirs
The Scotch (published in the UK under two alternative titles as Made to Last and The Non-potable Scotch: A Memoir of the Clansmen in Canada)[39] (illustrated by Samuel H. Bryant), Galbraith's account of his boyhood environment in Elgin County in southern Ontario, was written in 1963. His description of the people he grew up among is amusing, but hardly charitable.
Galbraith's 1981 memoir, A Life in Our Times[40] stimulated discussion of his thought, his life and times after his retirement from academic life. In 2004, the publication of an authorised biography, John Kenneth Galbraith: His Life, His Politics, His Economics[41] by friend and fellow progressive economist Richard Parker, renewed interest in his career and ideas.
[edit] Bibliography
Modern Competition and Business Policy, 1938.
A Theory of Price Control, 1952.
American Capitalism: The Concept of Countervailing Power, 1952.
The Great Crash, 1929, 1954.
Economics and the Art of Controversy, 1955.
The Affluent Society, 1958.
Perspectives on conservation, 1958. (Editor)
The Liberal Hour, 1960
Economic Development in Perspective, 1962.
The Scotch, 1963
The McLandress Dimension, 1963 (pseudonym Mark Epernay)
Economic Development, 1964.
The New Industrial State, 1967.
Beginner's Guide to American Studies, 1967.
How to get out of Vietnam, 1967.
The Triumph (a novel), 1968.
Ambassador's Journal, 1969.
How to control the military, 1969.
Indian Painting (with Mohinder Singh Randhawa), 1969.
Who needs democrats, and what it takes to be needed, 1970.
American Left and Some British Comparisons, 1971.
Economics, Peace and Laughter, 1972.
Power and the Useful Economist, 1973, AER
Economics and the Public Purpose, 1973
A China Passage, 1973.
John Kenneth Galbraith introduces India, 1974. (Editor)
Money: Whence It Came, Where It Went, 1975.
Socialism in rich countries and poor, 1975.
The Economic effects of the Federal public works expenditures, 1933-38, (with G. Johnson) 1975.
The Age of Uncertainty (also a BBC 13 part television series), 1977.
The Galbraith Reader, 1977.
Almost Everyone's Guide to Economics, 1978. (With Nicole Salinger.)
Annals of an Abiding Liberal, 1979.
The Nature of Mass Poverty, 1979.
A Life in Our Times, 1981.
The Voice of the Poor, 1983.
The Anatomy of Power, 1983.
Essays from the Poor to the Rich, 1983.
Reaganomics: Meaning, Means and Ends, (with Paul McCracken) 1983.
A View from the Stands, 1986.
Economics in Perspective: A Critical History, 1987.
Capitalism, Communism and Coexistence (with Stanislav Menshikov), 1988.
Unconventional Wisdom: Essays on Economics in Honour of John Kenneth Galbraith, 1989. (Editor)
A Tenured Professor, 1990.
A History of Economics: The Past as the Present, 1991.
The Culture of Contentment, 1992.
Recollections of the New Deal: When People Mattered, 1992. (Editor)
A Journey Through Economic Time, 1994.
The World Economy Since the Wars: A Personal View, 1994.
A Short History of Financial Euphoria, 1994.
The Good Society: the humane agenda, 1996.
Letters to Kennedy, 1998.
The socially concerned today, 1998.
Name-Dropping: From F.D.R. On, 1999.
The Essential Galbraith, 2001.
The Economics of Innocent Fraud, 2004.
John Kenneth Galbraith and the future of economics, 2005.
[edit] See also
Wikiquote has a collection of quotations related to: John Kenneth Galbraith
Liberalism
Communitarianism
List of liberal thinkers
The Best and the Brightest
[edit] References
Robert Sobel The Worldly Economists (1980).
Galbraith, John Kenneth (1970), "Nicholas U. Mayall", in Stone, Irving, There was light: Autobiography of a university: Berkeley, 1868–1968, Garden City, New York: Doubleday & Company, Inc, pp. 19–31, http://books.google.com/books?id=nuA7AAAAIAAJ
[edit] Footnotes
^ Liberal thinker JK Galbraith dies, an April 2006 BBC article
^ Order of Canada Citation
^ Galbraith receives prestigious award, a June 2001 Harvard News Gazette article
^ a b c d e Dunn, SP; Pressman, S (2005). "The Economic Contributions of John Kenneth Galbraith". Review of Political Economy 17 (2): 161–209. doi:10.1080/09538250500067254. http://www.bib.uab.es/socials/exposicions/galbraith/docs/bgalbraithDunn.pdf.
^ John Kenneth Galbraith, Longtime Economics Professor, Dies at 97, an April 2006 Harvard Crimson article
^ "India-China war 'accidental:' Galbraith", Colonel Anil Athale (retd), retrieved 12 October 2008.[1]
^ "Past AEA Officers". American Economic Association. http://www.vanderbilt.edu/AEA/officerspast.htm. Retrieved 2008-10-10.
^ Order of Canada citation, from the website of the Governor General of Canada
^ "John Kenneth Galbraith in St. John's". Canadian Broadcasting Corporation. http://www.cbc.ca/news/story/1999/10/21/nf_galbraith991021.html. Retrieved 2008-10-12.
^ http://www.bard.edu/catalogue/index.php?aid=278&sid=59&pid=
^ http://www.governingcouncil.utoronto.ca/Assets/Boards+and+Committees/Committee+for+Honorary+Degrees/1850.pdf
^ http://www.usask.ca/archives/history/hondegrees.php?id=163&view=detail&keyword=&campuses=
^ http://www.bc.edu/publications/factbook/meta-elements/html/fb97honor_dg_recip.html] [http://www.bc.edu/publications/factbook/meta-elements/pdf/06-07/06-07_honorary_deg.pdf
^ http://academic.hws.edu/library/archives/pdfs/HDR.pdf
^ http://www.uwo.ca/univsec/senate/honorary_degrees_by_surname.pdf
^ http://www.tufts.edu/trustees/data/hondeg.pdf
^ http://www.albion.edu/library/specialcollections/Histories/commencement.asp
^ http://www.knox.edu/About-Knox/Our-History/Honorary-Degrees.html
^ https://www.msu.edu/~vprgs/honorarydeg/Chronlist1961.htm
^ http://www.yorku.ca/secretariat/senate/committees/hondeg/recipients.htm
^ http://ruweb.rutgers.edu/governance/secretary/degrees-year.shtml
^ http://www.grinnell.edu/car/confops/commencement/sp_awards/hd/
^ http://www.smith.edu/collegerelations/honorary.php
^ http://www2.lse.ac.uk/ERD/pressAndInformationOffice/newsAndEvents/archives/1999/press-release_galbraith.aspx
^ http://www.mun.ca/president/99-00report/honor/honorary_galbraith.html
^ "The Age of Uncertainty", episode content, retrieved 30 May 2007
^ Political Economy: The Contest of Economic Ideas, 2002, by Frank Stilwell
^ (Galbraith, 1958 The Affluent Society: Chapter 2 "The Concept of Conventional Wisdom")
^ Galbraith interview with Colonel Anil Athale (retd), July 2003
^ John Kenneth Galbraith, 97, Dies; Economist, Diplomat and Writer a New York Times obituary from April 30, 2006
^ Adams, Philip (1999), Interview on Radio National, Late Night Live, Australian Broadcasting Corporation,. Accessed 17 Jan 2006.
^ Sharpe, Michael (2006), John Kenneth Galbraith, 1908-2006, Challenge: the Magazine of Economic Affairs, 49 (4):7
^ Galbraith, JK (1970). "Economics as a System of Belief". American Economic Review 60 (2): 469–78. http://cas.umkc.edu/econ/AFEE/EconomicsAsaSystemofBelief.pdf.
^ a b Galbraith JK. (1977). Money: Where It Came, Whence It Went. Houghton Mifflin.
^ Madrick, J. (May 26, 2005). "A Mind of His Own." Review of John Kenneth Galbraith: His Life, His Economics, His Politics. The New York Review of Books.
^ Paul Krugman. Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations. (Scranton, Pennsylvania: W. W. Norton, 1994), 10-15.
^ http://www.dissentmagazine.org/article/?article=790
^ http://www.realclearpolitics.com/articles/2008/08/the_galbraith_effect.html
^ ISBN 0-395-39382-5
^ ISBN 0-395-31135-7
^ Promotional website for John Kenneth Galbraith: His Life, His Politics, His Economics
http://en.wikipedia.org/wiki/John_Kenneth_Galbraith
John Kenneth "Ken" Galbraith, OC (October 15, 1908 – April 29, 2006) was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism and progressivism. His books on economic topics were bestsellers from the 1950s through the 1970s and he filled the role of public intellectual in this period on matters of economics.
Galbraith was a prolific author who produced four dozen books and over a thousand articles on various subjects. Among his most famous works was a popular trilogy on economics, American Capitalism (1952), The Affluent Society (1958), and The New Industrial State (1967). He taught at Harvard University for many years. Galbraith was active in politics, serving in the administrations of Franklin D. Roosevelt, Harry S. Truman, John F. Kennedy and Lyndon B. Johnson; and among other roles served as United States Ambassador to India under Kennedy.
He was one of the few honorees who received the Presidential Medal of Freedom twice. He received one in 1946 from President Truman and another in 2000 from President Bill Clinton.[1] He was also awarded the Order of Canada in 1997[2] and, in 2001, the Padma Vibhushan, India's second highest civilian award, for his contributions to strengthening ties between India and the United States.[3]
Early life and teaching
Galbraith was born to Canadians of Scottish descent, Archibald "Archie" Galbraith and Sarah Catherine Kendall, in Iona Station, Ontario, Canada, and was raised in Dunwich Township, Ontario. He had three siblings: Alice, Catherine and Archibald William (Bill). His early school years were spent at a one room school on Willy's Sideroad, which is still standing. The family farm is on Thomson Line. He went to school at Dutton High School. His father was a farmer and school teacher; his mother, a political activist. By the time he was a teenager, he had adopted the name Ken, and later disliked being called John.[4] Both his parents were supporters of the United Farmers of Ontario in the 1920s. After initially studying agriculture, Galbraith graduated from the Ontario Agricultural College (then affiliated with the University of Toronto, and now the University of Guelph) with a B.Sc degree in 1931, and then received an M.Sc (1933) and Ph.D in Agricultural Economics (1934) from the University of California, Berkeley. In 1934, he also became a tutor at Harvard University. In 1937, he became a United States citizen, at a time when the USA did not contemplate dual citizenship and Canada did not yet have a Citizenship Act, Canadians then being "British Subjects." By the 1980s and '90s respectively, the USA and Canada acknowledged that their citizens who had taken out citizenship in the others' countries were recognized as having also retained their original citizenship and Professor Galbraith died as he had been born - a Canadian, though he had previously already been amply honoured as a Canadian as well as American. In the same year, he took a year-long fellowship at Cambridge University, England, where he became influenced by John Maynard Keynes, then traveled in Europe for several months in 1938, attending an international economic conference and developing his ideas. Galbraith was a very tall man, growing to a reported height of 6'9" [206 cm].
Galbraith taught intermittently at Harvard in the period 1934 to 1939.[5] From 1939 to 1940, he taught at Princeton University. From 1943 until 1948, he served as editor of Fortune magazine. In 1949, he was appointed professor of economics at Harvard.
[edit] World War II and Price Administration
During World War II, Galbraith, charged with keeping inflation from crippling the war effort, served as deputy head of the Office of Price Administration. Because wartime production needs mandated large budget deficits and an accommodative monetary policy, the outbreak of inflation and a runaway wage-price spiral was seen as a very real possibility. In 1942, Roosevelt issued a General Maximum Price Regulation, followed a year later by a "Hold the Line Order" which froze prices and gave the OPE power to keep prices in check. The OPA itself - through its Consumer Division - mobilized the public on behalf of these guidelines, reducing the likelihood of "cheating" by those who would seek higher wages or prices. The result was that wages and prices were kept in check, and the U.S. enjoyed rapid growth and price stability through the war.
Although little appreciated at the time, the actual power Galbraith wielded in this position was so great that he joked later that the rest of his career had been downhill. Indeed, congressional and business backlash against the OPA meant that Galbraith would be forced out in 1943, eventually replaced by advertising executive Samuel Bowles.
At the end of the war, Galbraith was asked to be one of the leaders of the Strategic Bombing Surveys of both Europe and Japan. He also became an adviser to post-war administrations in Germany and Japan.
[edit] Political posts under Kennedy
Galbraith, far left, as US ambassador to India, 1961During his time as an adviser to President John F. Kennedy, Galbraith was appointed as United States Ambassador to India from 1961 to 1963. His rapport with President Kennedy was such that he regularly bypassed the State Department and sent his diplomatic cables directly to the President.[6] In India, he became an intimate of Prime Minister Jawaharlal Nehru, and extensively advised the Indian government on economic matters; he harshly criticised Louis Mountbatten, the last Viceroy of British rule, for Mountbatten's passive role in the Partition of India in 1947 and the bloody partition of the Punjab and Bengal. While in India, he helped establish one of the first computer science departments, at the Indian Institute of Technology in Kanpur, Uttar Pradesh. Even after leaving office, Galbraith remained a friend and supporter of India and hosted a lunch for Indian students at Harvard every year on graduation day.
Because of his recommendation, First Lady of the United States Jacqueline Bouvier Kennedy undertook her diplomatic missions in India and Pakistan.
[edit] Family
Galbraith married Catherine Merriam Atwater on September 17, 1937, whom he met while she was a Radcliffe student. They resided in Cambridge, Massachusetts, and had a summer home in Newfane, Vermont. They had four sons: J. Alan Galbraith is a partner in the prominent Washington D.C. law firm Williams & Connolly; Douglas Galbraith died in childhood of leukemia; Peter W. Galbraith has been a US diplomat who served as Ambassador to Croatia and is a widely published commentator on American foreign policy - particularly in the Balkans and the Middle East; James K. Galbraith is a prominent progressive economist at the University of Texas Lyndon B. Johnson School of Public Affairs. The Galbraiths also have ten grandchildren. [2]
[edit] Later life and recognition
In 1972 he served as president of the American Economic Association.[7] The Journal of Post Keynesian Economics benefited from Galbraith's support, and he served as the chairman of its board from its beginning.[4] In 1985, the American Humanist Association named him the Humanist of the Year. In 1997 he was made an Officer of the Order of Canada[8] and in 2000 he was awarded his second U. S. Presidential Medal of Freedom. He was also awarded an honorary doctorate from Memorial University of Newfoundland at the fall convocation of 1999.[9] He was also awarded in 2000 with the Leontief Prize for his outstanding contribution to economic theory by the Global Development and Environment Institute. The library in his home town Dutton, Ontario was renamed the John Kenneth Galbraith Reference Library in honor of his attachment to the library and his contributions to the new building.
On April 29, 2006, Galbraith died in Cambridge, Massachusetts of natural causes, after a two-week stay in a hospital.
Works
Although he was a president of the American Economic Association, Galbraith was considered an iconoclast by many economists. This is because he rejected the technical analyses and mathematical models of neoclassical economics as being divorced from reality. Rather, following Thorstein Veblen, he believed that economic activity could not be distilled into inviolable laws, but rather was a complex product of the cultural and political milieu in which it occurs. In particular, he believed that important factors such as advertising, the separation between corporate ownership and management, oligopoly, and the influence of government and military spending had been largely neglected by most economists because they are not amenable to axiomatic descriptions. In this sense, he worked as much in political economy as in classical economics.
His work included several best selling works throughout the fifties and sixties. After his retirement, he remained in the public consciousness by continuing to write new books and revise his old works as well as presenting a major series on economics for BBC television in 1977 "The Age of Uncertainty".[26] While some considered his views anachronistic during the pro-market, small-government, anti-regulation and low-tax orthodoxies which came to prominence in the 1980s, the downfall of those ideas' popularity with the late 2000s economic crisis has awakened interest in his theories once again.
In addition to his books, he wrote hundreds of essays and a number of novels. Among his novels, A Tenured Professor achieved particular critical acclaim.
[edit] Economics books
Galbraith was an important figure in 20th century institutional economics, and provides perhaps the exemplar institutionalist perspective on Economic Power[27].
In American Capitalism: The Concept of Countervailing Power, published in 1952, Galbraith outlined how the American economy in the future would be managed by a triumvirate of big business, big labor, and an activist government. Galbraith termed the reaction of lobby groups and unions "countervailing power." He contrasted this arrangement with the previous pre-depression era where big business had relatively free rein over the economy.
His 1954 bestseller The Great Crash, 1929 describes the famous Wall Street melt down of stock prices and how markets progressively become decoupled from reality in a speculative boom. The book is also a platform for Galbraith's keen insights, and humour, into human behaviour when wealth is threatened. It has never been out of print.
The influence of the Wall St crash on the Great Depression
Contrary to what had been Wall Street's perceived tendency in playing down its influence, Galbraith asserted the important contribution of the 1929 crash on the Great Depression which followed:[15] causing a contraction of demand for goods, destroying for a time the normal means of investment and lending, arresting economic growth and causing financial hardship which alienated many from the economic system. [2] Galbraith further argues that the Great Depression was caused by a mixture of five main weaknesses: First, an imbalance in the income distribution. Galbraith asserts "that the 5 per cent of the population with the highest incomes in that year [1929] received approximately one third of all personal income". Personal income in the form of rents, dividends and interest of the well-to-do was approximately twice as much as the period following the Second World War, leaving the economy dependent on a high level of investment and, or, luxury consumer spending with its potential exposure to the Crash of 1929.[16]
Second, problems in the structure of corporations. Most specifically, he cites newly formed investment entities of the era (such as holding companies and investment trusts) as contributing to a deflationary spiral due in no small part to their high reliance on leverage. Dividends paid the interest on the bonds in the holding companies and when these were interrupted the structure collapsed. “It would be hard to imagine a corporate system better designed to continue and accentuate a deflationary cycle." Also “The fact was that American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors, and frauds. This, in the long history of such activities, was a kind of flood tide of corporate larceny.”[16]
Third, the bad banking structure. The weakness was manifest in the large number of units working independently. As one failed pressure was applied to another leading to a domino effect accelerated by increasing unemployment and lower incomes.[17]
Fourth, foreign trade imbalances. During World War I, the US became a creditor nation, exporting more than it imported. High tariffs on imports contributed to this imbalance. Subsequent defaults by foreign governments led to a decline in exports, which was especially hard on farmers.
And finally, "the poor state of economic intelligence". Galbraith says that the "economists and those who offered economic counsel in the late twenties and early thirties were almost uniquely perverse" and that reputable economic advice was invariably on the sides steps that made things worse".[18]
Prospects for recurrence
Galbraith was of the opinion that the Great Crash had burned itself so deeply into the national consciousness that America had been spared another bubble up to the present time (1954).[19]; however he thought the chances of another speculative orgy which characterized the 1929 crash as rather good as he felt the American people remained susceptible to the conviction that unlimited rewards were to be had and that they individually were meant to share in it. He considered the sense of responsibility in the financial community for the wider community as whole as not being small but "nearly nil".[20] Even though government powers were available to prevent a recurrence of a bubble their use was not attractive or politically expedient since an election is in the offing even on the day after an election.[21]
In his most famous work, The Affluent Society (1958), which also became a bestseller, Galbraith outlined his view that to become successful, post-World War II America should make large investments in items such as highways and education using funds from general taxation.
Galbraith also critiqued the assumption that continually increasing material production is a sign of economic and societal health. Because of this Galbraith is sometimes considered one of the first post-materialists. In this book, he coined and popularized the phrase "conventional wisdom".[28] Galbraith worked on the book while in Switzerland, and had originally titled it Why The Poor Are Poor but changed it to The Affluent Society at his wife's suggestion.[29] The Affluent Society contributed (likely to a significant degree, given that Galbraith had the ear of President Kennedy [30]) to the "war on poverty," the government spending policy first brought on by the administrations of Kennedy and Johnson.
In The New Industrial State (1967), Galbraith argues that very few industries in the United States fit the model of perfect competition. In The New Industrial State Galbraith expanded his analysis of the role of power in economic life. A central concept of the book is the revised sequence. The conventional wisdom in economic thought portrays economic life as a set of competitive markets governed ultimately by the decisions of sovereign consumers. In this original sequence, the control of the production process flows from consumers of commodities to the organizations that produce those commodities. In the revised sequence, this flow is reversed and businesses exercise control over consumers by advertising and related salesmanship activities.
The revised sequence concept applies only to the industrial system - that is, the manufacturing core of the economy in which each industry contains only a handful of very powerful corporations. It does not apply to the market system in the Galbraithian dual economy. In the market system, composed of the vast majority of business organizations, price competition remains the dominant form of social control. In the industrial system, however, composed of the 1,000 or so largest corporations, competitive price theory obscures the relation to the price system of these large and powerful corporations. In Galbraith's view, the principal function of market relations in this industrial system is not to constrain the power of the corporate behemoths but to serve as an instrument for the implementation of their power. Moreover, the power of these corporations extends into commercial culture and politics, allowing them to exercise considerable influence upon popular social attitudes and value judgments. That this power is exercised in the shortsighted interest of expanding commodity production and the status of the few is both inconsistent with democracy and a barrier to achieving the quality of life which the new industrial state with its affluence could provide.
The New Industrial State not only provided Galbraith with another best-selling book, it also extended once again the currency of Institutionalist economic thought. The book also filled a very pressing need in the late 1960s. The conventional theory of monopoly power in economic life maintains that the monopolist will attempt to restrict supply in order to maintain price above its competitive level. The social cost of this monopoly power is a decrease in both allocative efficiency and the equity of income distribution. This conventional economic analysis of the role of monopoly power did not adequately address popular concern about the large corporation in the late 1960s. The growing concern focused on the role of the corporation in politics, the damage done to the natural environment by an unmitigated commitment to economic growth, and the perversion of advertising and other pecuniary aspects of culture. The New Industrial State gave a plausible explanation of the power structure involved in generating these problems and thus found a very receptive audience among the rising American counterculture and political activists.
A third related work was Economics and the Public Purpose (1973), in which he expanded on these themes by discussing, among other issues, the subservient role of women in the unrewarded management of ever-greater consumption, and the role of the technostructure in the large firm in influencing perceptions of sound economic policy aims.
In A Short History of Financial Euphoria (1994), he traces speculative bubbles through several centuries, and argues that they are inherent in the economic system because of "mass psychology" and the "vested interest in error that accompanies speculative euphoria." Also, financial memory is "notoriously short": what currently seems to be a "new financial instrument" is inevitably nothing of the sort. Galbraith cautions: "The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version." Crucial to his analysis is the assertion that the common factor in boom and bust is the creation of debt to finance speculation, which "becomes dangerously out of scale in relation to the underlying means of payment".
Galbraith cherished The New Industrial State and The Affluent Society as his two best.[31] Economist and friend of Galbraith Michael Sharpe visited Galbraith in 2004, on which occasion Galbraith gifted him with a copy of what would be Galbraith's last book, The Economics of Innocent Fraud. Galbraith confided in Sharpe that "[t]his is my best book", an assertion Galbraith delivered "a little mischievously." [32]
[edit] Some of Galbraith's Ideas
Galbraith's main ideas focused around the influence of the market power of large corporations.[4] He believed that this market power weakened the widely-accepted principle of consumer sovereignty, allowing corporations to be price makers, rather than price takers,[33] allowing corporations with the strongest market power to increase the production of their goods beyond an efficient amount. He further believed that market power played a major role in inflation[4] and argued that corporations and trade unions could only increase prices to the extent that their market power allowed them to. He argued that in situations of excessive market power, price controls effectively controlled inflation, but cautioned against using them in markets that were basically efficient such as agricultural goods and housing.[34] He noted that price controls were much easier to enforce in industries with relatively few buyers and sellers.[34]:244 Galbraith's view of market power was not entirely negative; he also noted that the power of US firms played a part in the success of the US economy.
In The Affluent Society Galbraith asserts that classical economic theory was true for the eras before the present, which were times of "poverty"; now, however, we have moved from an age of poverty to an age of "affluence," and for such an age, a completely new economic theory is needed. Galbraith's main argument is that as society becomes relatively more affluent, so private business must "create" consumer wants through advertising, and while this generates artificial affluence through the production of commercial goods and services, the public sector becomes neglected. He points out that while many Americans were able to purchase luxury items, their parks were polluted and their children attended poorly maintained schools. He argues that markets alone will underprovide (or fail to provide at all) for many public goods, whereas private goods are typically 'overprovided' due to the process of advertising creating an artificial demand above the individual's basic needs. This emphasis on the power of advertising and consequent overconsumption may have anticipated the drop in savings rates in the USA and elsewhere in the developing world.[4]
Galbraith proposed curbing the consumption of certain products through greater use of consumption taxes, arguing that this could be more efficient than other forms of taxation, such as labour or land taxes. Galbraith's major proposal was a program he called "investment in men" — a large-scale publicly-funded education program aimed at empowering ordinary citizens. Galbraith wished to entrust citizens with the future of the American republic.
Volume 20, issue 4 of the Review of Political Economy was dedicated to John Kenneth Galbraith's ideas.
[edit] Criticism of Galbraith's Work
Galbraith's work, in general, and The Affluent Society, in particular, have drawn sharp criticism from free-market supporters at the time of its publication. Monetarist Milton Friedman in "Friedman on Galbraith, and on curing the British disease" views Galbraith as a 20th century version of the early 19th century Tory radical of Great Britain. He asserts that Galbraith believes in the superiority of aristocracy and in its paternalistic authority, that consumers should not be allowed choice and that all should be determined by those with "higher minds":
Many reformers – Galbraith is not alone in this – have as their basic objection to a free market that it frustrates them in achieving their reforms, because it enables people to have what they want, not what the reformers want. Hence every reformer has a strong tendency to be averse to a free market.
Richard Parker, in his biography John Kenneth Galbraith: His Life, His Economics, His Politics, characterizes Galbraith as more complex. Galbraith's primary purpose in Capitalism: The Concept of Countervailing Power (1952) was, ironically, to show that big business was now necessary to the American economy to maintain the technological progress that drives economic growth. However, Galbraith saw the necessity of "countervailing power," not only including government regulation and oversight, but also collective bargaining, and the suasion that large retailers and distributors could bring to bear on large producers and suppliers. In The New Industrial State (1967), Galbraith argued that the dominant American corporations had created a technostructure that closely controlled both consumer demand and market growth through advertising and marketing. While Galbraith defended government intervention, Parker notes that he also believed that government and big business worked together to maintain stability.[35]
Paul Krugman, the influential, Nobel Prize–winning Princeton University professor and New York Times op-ed columnist, has denigrated Galbraith's stature as an economist. In Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations, he calls Galbraith a "policy entrepreneur" – an economist who writes solely for the public, as opposed to one who writes for other professors, and who therefore makes unwarranted diagnoses and offers over-simplistic answers to complex economic problems. He asserts that Galbraith was never taken seriously by fellow academics, who viewed him as more of a "media personality". For example, Krugman believes that Galbraith's work The New Industrial State is not considered to be "real economic theory", and that Economics in Perspective is "remarkably ill-informed".[36] However, acknowledging the alleged damage caused by the George W. Bush administration, Krugman now says of his polemics in the 1990s, “I was wrong obviously. If I’d understood where politics would be now, it would have been quite different.”[37]
Describing the reception of Galbraith's lectures by students at Harvard, Thomas Sowell coined the term "the Galbraith Effect":
“On the first day of class, Professor Galbraith gave a brilliant opening lecture, after which the students gave him a standing ovation. Galbraith kept on giving brilliant opening lectures the whole semester. But, instead of standing ovations, there were now dwindling numbers of students and some of them got up and walked out in the middle of his lectures. Galbraith never got beyond the glittering generalities that marked his first lecture. After a while, the students got tired of not getting any real substance.” [38]
[edit] Memoirs
The Scotch (published in the UK under two alternative titles as Made to Last and The Non-potable Scotch: A Memoir of the Clansmen in Canada)[39] (illustrated by Samuel H. Bryant), Galbraith's account of his boyhood environment in Elgin County in southern Ontario, was written in 1963. His description of the people he grew up among is amusing, but hardly charitable.
Galbraith's 1981 memoir, A Life in Our Times[40] stimulated discussion of his thought, his life and times after his retirement from academic life. In 2004, the publication of an authorised biography, John Kenneth Galbraith: His Life, His Politics, His Economics[41] by friend and fellow progressive economist Richard Parker, renewed interest in his career and ideas.
[edit] Bibliography
Modern Competition and Business Policy, 1938.
A Theory of Price Control, 1952.
American Capitalism: The Concept of Countervailing Power, 1952.
The Great Crash, 1929, 1954.
Economics and the Art of Controversy, 1955.
The Affluent Society, 1958.
Perspectives on conservation, 1958. (Editor)
The Liberal Hour, 1960
Economic Development in Perspective, 1962.
The Scotch, 1963
The McLandress Dimension, 1963 (pseudonym Mark Epernay)
Economic Development, 1964.
The New Industrial State, 1967.
Beginner's Guide to American Studies, 1967.
How to get out of Vietnam, 1967.
The Triumph (a novel), 1968.
Ambassador's Journal, 1969.
How to control the military, 1969.
Indian Painting (with Mohinder Singh Randhawa), 1969.
Who needs democrats, and what it takes to be needed, 1970.
American Left and Some British Comparisons, 1971.
Economics, Peace and Laughter, 1972.
Power and the Useful Economist, 1973, AER
Economics and the Public Purpose, 1973
A China Passage, 1973.
John Kenneth Galbraith introduces India, 1974. (Editor)
Money: Whence It Came, Where It Went, 1975.
Socialism in rich countries and poor, 1975.
The Economic effects of the Federal public works expenditures, 1933-38, (with G. Johnson) 1975.
The Age of Uncertainty (also a BBC 13 part television series), 1977.
The Galbraith Reader, 1977.
Almost Everyone's Guide to Economics, 1978. (With Nicole Salinger.)
Annals of an Abiding Liberal, 1979.
The Nature of Mass Poverty, 1979.
A Life in Our Times, 1981.
The Voice of the Poor, 1983.
The Anatomy of Power, 1983.
Essays from the Poor to the Rich, 1983.
Reaganomics: Meaning, Means and Ends, (with Paul McCracken) 1983.
A View from the Stands, 1986.
Economics in Perspective: A Critical History, 1987.
Capitalism, Communism and Coexistence (with Stanislav Menshikov), 1988.
Unconventional Wisdom: Essays on Economics in Honour of John Kenneth Galbraith, 1989. (Editor)
A Tenured Professor, 1990.
A History of Economics: The Past as the Present, 1991.
The Culture of Contentment, 1992.
Recollections of the New Deal: When People Mattered, 1992. (Editor)
A Journey Through Economic Time, 1994.
The World Economy Since the Wars: A Personal View, 1994.
A Short History of Financial Euphoria, 1994.
The Good Society: the humane agenda, 1996.
Letters to Kennedy, 1998.
The socially concerned today, 1998.
Name-Dropping: From F.D.R. On, 1999.
The Essential Galbraith, 2001.
The Economics of Innocent Fraud, 2004.
John Kenneth Galbraith and the future of economics, 2005.
[edit] See also
Wikiquote has a collection of quotations related to: John Kenneth Galbraith
Liberalism
Communitarianism
List of liberal thinkers
The Best and the Brightest
[edit] References
Robert Sobel The Worldly Economists (1980).
Galbraith, John Kenneth (1970), "Nicholas U. Mayall", in Stone, Irving, There was light: Autobiography of a university: Berkeley, 1868–1968, Garden City, New York: Doubleday & Company, Inc, pp. 19–31, http://books.google.com/books?id=nuA7AAAAIAAJ
[edit] Footnotes
^ Liberal thinker JK Galbraith dies, an April 2006 BBC article
^ Order of Canada Citation
^ Galbraith receives prestigious award, a June 2001 Harvard News Gazette article
^ a b c d e Dunn, SP; Pressman, S (2005). "The Economic Contributions of John Kenneth Galbraith". Review of Political Economy 17 (2): 161–209. doi:10.1080/09538250500067254. http://www.bib.uab.es/socials/exposicions/galbraith/docs/bgalbraithDunn.pdf.
^ John Kenneth Galbraith, Longtime Economics Professor, Dies at 97, an April 2006 Harvard Crimson article
^ "India-China war 'accidental:' Galbraith", Colonel Anil Athale (retd), retrieved 12 October 2008.[1]
^ "Past AEA Officers". American Economic Association. http://www.vanderbilt.edu/AEA/officerspast.htm. Retrieved 2008-10-10.
^ Order of Canada citation, from the website of the Governor General of Canada
^ "John Kenneth Galbraith in St. John's". Canadian Broadcasting Corporation. http://www.cbc.ca/news/story/1999/10/21/nf_galbraith991021.html. Retrieved 2008-10-12.
^ http://www.bard.edu/catalogue/index.php?aid=278&sid=59&pid=
^ http://www.governingcouncil.utoronto.ca/Assets/Boards+and+Committees/Committee+for+Honorary+Degrees/1850.pdf
^ http://www.usask.ca/archives/history/hondegrees.php?id=163&view=detail&keyword=&campuses=
^ http://www.bc.edu/publications/factbook/meta-elements/html/fb97honor_dg_recip.html] [http://www.bc.edu/publications/factbook/meta-elements/pdf/06-07/06-07_honorary_deg.pdf
^ http://academic.hws.edu/library/archives/pdfs/HDR.pdf
^ http://www.uwo.ca/univsec/senate/honorary_degrees_by_surname.pdf
^ http://www.tufts.edu/trustees/data/hondeg.pdf
^ http://www.albion.edu/library/specialcollections/Histories/commencement.asp
^ http://www.knox.edu/About-Knox/Our-History/Honorary-Degrees.html
^ https://www.msu.edu/~vprgs/honorarydeg/Chronlist1961.htm
^ http://www.yorku.ca/secretariat/senate/committees/hondeg/recipients.htm
^ http://ruweb.rutgers.edu/governance/secretary/degrees-year.shtml
^ http://www.grinnell.edu/car/confops/commencement/sp_awards/hd/
^ http://www.smith.edu/collegerelations/honorary.php
^ http://www2.lse.ac.uk/ERD/pressAndInformationOffice/newsAndEvents/archives/1999/press-release_galbraith.aspx
^ http://www.mun.ca/president/99-00report/honor/honorary_galbraith.html
^ "The Age of Uncertainty", episode content, retrieved 30 May 2007
^ Political Economy: The Contest of Economic Ideas, 2002, by Frank Stilwell
^ (Galbraith, 1958 The Affluent Society: Chapter 2 "The Concept of Conventional Wisdom")
^ Galbraith interview with Colonel Anil Athale (retd), July 2003
^ John Kenneth Galbraith, 97, Dies; Economist, Diplomat and Writer a New York Times obituary from April 30, 2006
^ Adams, Philip (1999), Interview on Radio National, Late Night Live, Australian Broadcasting Corporation,
^ Sharpe, Michael (2006), John Kenneth Galbraith, 1908-2006, Challenge: the Magazine of Economic Affairs, 49 (4):7
^ Galbraith, JK (1970). "Economics as a System of Belief". American Economic Review 60 (2): 469–78. http://cas.umkc.edu/econ/AFEE/EconomicsAsaSystemofBelief.pdf.
^ a b Galbraith JK. (1977). Money: Where It Came, Whence It Went. Houghton Mifflin.
^ Madrick, J. (May 26, 2005). "A Mind of His Own." Review of John Kenneth Galbraith: His Life, His Economics, His Politics. The New York Review of Books.
^ Paul Krugman. Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations. (Scranton, Pennsylvania: W. W. Norton, 1994), 10-15.
^ http://www.dissentmagazine.org/article/?article=790
^ http://www.realclearpolitics.com/articles/2008/08/the_galbraith_effect.html
^ ISBN 0-395-39382-5
^ ISBN 0-395-31135-7
^ Promotional website for John Kenneth Galbraith: His Life, His Politics, His Economics
http://en.wikipedia.org/wiki/John_Kenneth_Galbraith
Paul Krugman Economics
From Wikipedia, the free encyclopedia
Paul Robin Krugman (born February 28, 1953) is an American economist, liberal columnist and author. He is Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs, Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times.[4][5] In 2008, Krugman won the Nobel Memorial Prize in Economics for his contributions to New Trade Theory and New Economic Geography. He was voted sixth in Prospect Magazine's 2005 global poll of the world's top 100 intellectuals.[6]
The Nobel Prize Committee stated that Krugman's main contribution had been to explain 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.[7] Krugman's work on international economics, including trade theory, economic geography, and international finance[8][9] has established him as one of the most influential economists in the world according to IDEAS/RePEc.[10] Krugman is also known in academia for his work on liquidity traps and on currency crises.
As of 2006, Krugman had written or edited more than 25 books, 40 scholarly articles and 750 columns at The New York Times dealing with current economic and political issues.[11] Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld is a standard introductory textbook on international economics. He also writes on political and economic topics for the general public, as well as on 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".[12]
Personal life
Krugman is the son of David and Anita Krugman and the grandson of Jewish immigrants from Brest-Litovsk.[13] He grew up on Long Island in New York and graduated from John F. Kennedy High School in Bellmore.[14] He is married to Robin Wells, his second wife, an academic economist who has collaborated on textbooks with Krugman. They have no children.[15][16] They currently live in New York.[17]
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.[18][19]
[edit] Academic career
Krugman earned his B.A. in economics from Yale University in 1974 and his Ph.D. 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.[20] 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, as well as the Council on Foreign Relations. He has been a research associate at the National Bureau of Economic Research since 1979.[21]
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 12th most influential economist in the world as of July 2009 based on his academic contributions.[22] Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld, is a standard introductory textbook on international economics. 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 to analyze the impact of economies of scale, combined with the assumption that consumers appreciate diversity, on international trade and on the location of economic activity.[7] 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."[23]
On a lighter note, 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".[24]
[edit] 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 poor country exporting agricultural goods to a rich country in exchange for industrial products. 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.[25] 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. Krugman's model also involved introducing transportation costs, a key feature in producing the "home market effect" which would later become key for Krugman's work on the new economic geography. The home market effect "states that, ceteris paribus, the country with the larger demand for a good will, at equilibrium, produce a more than proportionate share of that good and be a net exporter of it."[23] The home market effect was an unexpected result, and Krugman initially questioned it, but ultimately concluded that the mathematics of the model was correct.[23]
Many models of international trade now follow Krugman's lead, incorporating economies of scale in production and a preference for diversity in consumption.[7] This way of modeling trade has come to be called New Trade Theory.[23]
When there are economies of scale in production, it is possible that countries may become 'locked in' to disadvantageous patterns of trade.[26] Nonetheless, trade remains beneficial in general, even between relatively 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.[27] Krugman has usually been supportive of free trade and globalization[28][29]. 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.[30]
New economic geography
It took an interval of eleven years, but ultimately Krugman's work on New Trade Theory (NTT) led quite naturally 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.[31]. 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."[32] This would become Krugman's most-cited academic paper: by early 2009, it had 857 citations, more than double his second-ranked paper.[23] Krugman called the paper "the love of my life in academic work."[33]
Where in NTT Krugman had developed the "home market effect", that same effect features in NEG. NEG explains agglomeration "as the outcome of the interaction of increasing returns, trade costs and factor price differences."[23] 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, Krugman's trade theory 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 also have higher levels of income.[7][9]
International finance
Krugman has also been influential in the field of international finance. In 1979 he published a paper on currency crises in the Journal of Money, Credit, and Banking showing 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,[34][35] and it is his second-most-cited paper (457 citations as of early 2009).[23]
In response to the global financial crisis of 2008, Krugman proposed, in an informal "mimeo" style of publication,[36] 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.[37][38][39] He first announced that he was working on such a model on his blog, on Oct 5th, 2008.[40] Within days of its appearance, it was being discussed on some popular economics-oriented blogs.[41][42] The note was not long after being cited in papers (draft and published) by other economists,[43][44][45][46][47][48][49][50] even though it had not itself been through ordinary peer review processes.
[edit] Macroeconomics and fiscal policy
Krugman has done much to revive discussion of the liquidity trap as a topic in economics.[51][52][53][54] 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.[55][56][57] The debate he started at that time over liquidity traps and what policies best address them continues in the economics literature.[58]
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 stagflation.[59] Tim Congdon however argued that Krugman was describing a narrow liquidity trap, in which the short-term interest rate in the money markets cannot be reduced by increases in the monetary base, while Keynes had been describing a broader trap where increases in the broadly defined quantity of money could not reduce the yield on government bonds; since increases in broad money in Japan in the stagflatory period were slow, Krugman had no evidence to claim that Japan was in a genuine Keynesian liquidity trap.[60]
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."[57] The proposal appeared first in a web posting on his academic site.[61] 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.[62][63][64]
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.[65] 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.[66]
[edit] Nobel Memorial Prize
Krugman was awarded the Nobel Memorial Prize in Economic Sciences, 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.[67] 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."[68] The prize was awarded before the U.S. presidential elections raising speculation and criticism that political considerations affected the Nobel committee's decision. Economist Gregory Mankiw disputed this, saying, "I see no evidence that the Nobel committee in economics has been politicized at all."[69]
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. Taken as a whole, it was a scathing attack on the George W. Bush 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 the Iraq war — were in the long run unsustainable, and would eventually generate a major economic crisis. The book was a best-seller.[70][71][72]
In 2007, Krugman published The Conscience of a Liberal, whose title references Barry Goldwater's Conscience of a Conservative.[73] 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. 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 played a much greater role than commonly thought, 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 implementing policies that greatly 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".[74][75] In this connection, he said that Ronald Reagan had been able to use the so-called "Southern Strategy" to "signal sympathy for racism without saying anything overtly racist,"[76] citing as an example Reagan's coining of the term "welfare queen".[77]
In his book, Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense.[78] 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."[74] 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".[79]
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.
[edit] Commentator
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."[80] 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."[80] Krugman has been described as the most controversial economist in his generation[81][82] and according to Michael Tomasky since 1992 he has moved "from being a center-left scholar to being a liberal polemicist."[74]
From the mid-1990s onwards, Krugman wrote for Fortune (1997 - 99)[21] and Slate (1996 - 99),[21] 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.[83]
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.[81] 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." [83][84]
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."[83] 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...."[83] Krugman accused Bush of repeatedly misrepresenting his proposals, and criticized the proposals themselves.[83] 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."[83] 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."[83]
Krugman's New York Times columns have drawn criticisms 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," referencing critics who felt that "his relentless partisanship is getting in the way of his argument" and citing what it claimed were errors of economic and political reasoning in Krugman's columns.[70] A 2008 commentary by economist Daniel B. Klein in Econ Journal Watch criticizes Krugman's columns and argues 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."[11] Daniel Okrent, a former New York Times ombudsman, in his farewell column, criticized Paul Krugman for what he claimed (without supplying details) 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."[85][86]
Krugman also has a blog, named Conscience of a Liberal, in which he discusses economics, politics, and policy.
[edit] 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.[87] His article 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 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.[88]
During the 1997 Asian financial crisis, Krugman advocated currency controls as a way to mitigate the crisis, writing in a Fortune (magazine) article, "Is there any way out? Yes, there is, but it is a solution so unfashionable, so stigmatized, that hardly anyone has dared suggest it. The unsayable words are 'exchange controls'."[89] In an open letter to Malaysian Prime Minister Mahathir bin Mohamad, after controls were adopted, he wrote that because of his Fortune article, he "couldn't deny some responsibility" for Malaysia's decision.[90][91] It was later reported that he thought the article's publication was ill-judged.[92] 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.[93] South Korea and Thailand, two countries that did not restrict currency flows, recovered more quickly than Malaysia.[93] All countries rebounded from the crisis within two years.[94] Krugman later acknowledged that the controls might not have been necessary at the time they were applied, but nevertheless insisted that "Malaysia has proved a point—namely, that controlling capital in a crisis is at least feasible."[95]
[edit] U.S. economic policies
In the early 2000s, Krugman repeatedly criticized the Bush tax cuts, both before and after they were enacted. Krugman stated that the tax cuts enlarged the budget deficit without improving the economy, and that they enriched the wealthy – worsening income distribution in the US.[72][96][97][98][99] 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.[99]
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."[100]
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.[101][102][103][104]
Krugman has been a prominent critic of the Obama administration's economic policies, in particular its efforts to prop up the US financial system, which he considers unsustainable in its present form.[86] Krugman has criticized the Obama stimulus plan as inadequate 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."[105]
[edit] Enron consultancy
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 New York Times rules regarding conflicts of interest, when he accepted the Times's offer to become an op-ed columnist.[106] 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.[106] 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.[107]
When the story of Enron's corporate scandals broke, Krugman was accused of unethical journalism, specifically of having a conflict of interest.[108][109][110] Some of his critics claimed that "The Ascent of E-man," an article Krugman wrote for Fortune Magazine[111] about the rise of the market as illustrated by Enron's energy trading, was biased by Krugman's earlier consulting work for them.[106] 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."[106] Krugman noted his previous relationship with Enron in that article and in other articles he wrote on the company.[106][112] Krugman was one of the first to argue that deregulation of the California energy market had led to illegal market-manipulation by Enron and other energy companies.[106][113]
[edit] Economic views
This section requires expansion.
Krugman identifies as a Keynesian[114] and a saltwater economist,[1] and he has criticized the freshwater school on macroeconomics.[2][115]
In the wake of the 2007-2009 financial crisis he has remarked that he is "gravitating towards a Keynes-Fisher-Minsky view of macro."[116] Post-Keynesian observers cite commonalities between Krugman's views and those of the Post-Keynesian school.[117]
[edit] Political views
Krugman describes himself as liberal. He has explained that he views the term "liberal" in the American context to mean "more or less what social democratic means in Europe."[73] A 2009 Newsweek article 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.[86] In 1996, Newsweek 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."[81]
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,[118] argued that "sweatshops" are preferable to unemployment,[28] challenged minimum wage and living wage laws,[119] likened the opposition against free trade and globalization to the opposition against evolution via natural selection,[120] opposed farm subsidies[121] and mandates, subsidies, and tax breaks for ethanol,[122] questioned NASA's manned space flights,[123] and written against some aspects of European labor market regulation.[124][125] 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'."[126][127]
On US race relations, Krugman has repeatedly criticized the Republican Party leadership for what he sees as a strategic (but largely tacit) reliance on racial divisions.[128][129][130] In his Conscience of a Liberal, he wrote
The changing politics of race made it possible for a revived conservative movement, whose ultimate goal was to reverse the achievements of the New Deal, to win national elections – even though it supported policies that favored the interests of a narrow elite over those of middle- and lower-income Americans.[131]
Krugman also once wrote in defense of conservative economist Glenn Loury that Loury, in defiance of many African-American political leaders,[132] had clearly seen and articulated 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."[133][134][135]
His appointment in the Reagan administration, he has stated in an autobiographical essay, was not expected or fitting. "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."[20]
Krugman has praised Gordon Brown, the British Prime Minister, asserting that he "defined the character of the worldwide [financial] rescue effort" and has since urged British voters not to support the opposition Conservative Party, arguing their Party Leader David Cameron "has had little to offer other than to raise the red flag of fiscal panic."[136][137]
[edit] Awards
1991, American Economic Association, John Bates Clark Medal.[138] 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'.[70]
1992, Fellow of the American Academy of Arts and Sciences (AAAS).[21]
1995, Adam Smith Award of the National Association for Business Economics
2000, H.C. Recktenwald Prize in Economics, awarded by University of Erlangen-Nuremberg in Germany.
2002, Editor and Publisher, Columnist of the Year.[139]
2004, Fundación Príncipe de Asturias (Spain), Prince of Asturias Awards in Social Sciences.[140]
2004, Doctor of Humane Letters honoris causa, Haverford College[10]
2008, Nobel Memorial Prize in Economics (formally The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) for Krugman's contributions to New Trade Theory.[141] He became the twelfth John Bates Clark Medal winner to be awarded the Nobel Memorial Prize.
[edit] Published works
[edit] Academic books (authored or coauthored)
The Spatial Economy - Cities, Regions and International Trade (July 1999), with Masahisa Fujita and Anthony Venables. MIT Press, ISBN 0262062046
The Self Organizing Economy (February 1996), ISBN 1557866988
EMU and the Regions (December 1995), with Guillermo de la Dehesa. ISBN 1567080383
Development, Geography, and Economic Theory (Ohlin Lectures) (September 1995), ISBN 0262112035
Foreign Direct Investment in the United States (3rd Edition) (February 1995), with Edward M. Graham. ISBN 0881322040
World Savings Shortage (September 1994), ISBN 0881321613
What Do We Need to Know About the International Monetary System? (Essays in International Finance, No 190 July 1993) ISBN 0881650978
Currencies and Crises (June 1992), ISBN 0262111659
Geography and Trade (Gaston Eyskens Lecture Series) (August 1991), ISBN 0262111594
The Risks Facing the World Economy (July 1991), with Guillermo de la Dehesa and Charles Taylor. ISBN 1567080731
Has the Adjustment Process Worked? (Policy Analyses in International Economics, 34) (June 1991), ISBN 0881321168
Rethinking International Trade (April 1990), ISBN 0262111489
Trade Policy and Market Structure (March 1989), with Elhanan Helpman. ISBN 0262081822
Exchange-Rate Instability (Lionel Robbins Lectures) (November 1988), ISBN 0262111403
Adjustment in the World Economy (August 1987) ISBN 1567080235
Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1985), with Elhanan Helpman. ISBN 0262081504
[edit] Academic books (edited or coedited)
Currency Crises (National Bureau of Economic Research Conference Report) (September 2000), ISBN 0226454622
Trade with Japan : Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1995), ISBN 0226454592
Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April, 1994), co-edited with Alasdair Smith. ISBN 0226454606
Exchange Rate Targets and Currency Bands (October 1991), co-edited with Marcus Miller. ISBN 0521415330
Strategic Trade Policy and the New International Economics (January 1986), ISBN 0262111128
[edit] Economics textbooks
Economics: European Edition (Spring 2007), with Robin Wells and Kathryn Graddy. ISBN 0716799561
Macroeconomics (February 2006), with Robin Wells. ISBN 0716767635
Economics (December 2005), with Robin Wells. ISBN 1572591501
Microeconomics (March 2004), with Robin Wells. ISBN 0716759977
International Economics: Theory and Policy, with Maurice Obstfeld. 7th Edition (2006), ISBN 0321293835; 1st Edition (1998), ISBN 0673521869
[edit] Books for a general audience
The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0393071014
An updated version of his previous work.
The Conscience of a Liberal (October 2007) ISBN 0393060691
The Great Unraveling: Losing Our Way in the New Century (September 2003) ISBN 0393058506
A book of his 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 0393050629
The Return of Depression Economics (May 1999) ISBN 039304839X
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 0393071014
The Accidental Theorist and Other Dispatches from the Dismal Science (May 1998) ISBN 0393046389
Essay collection, primarily from Krugman's writing for Slate.
Pop Internationalism (March 1996) ISBN 0262112108
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 0393312925
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 026211156X
A "briefing book" on the major policy issues around the economy.
Revised and Updated, January 1994, ISBN 0262610922
Third Edition, August 1997, ISBN 0262112248
[edit] Selected academic articles
(1996) 'Are currency crises self-fulfilling?' NBER Macroeconomics Annual 11, pp. 345–78.
(1991) 'Increasing returns and economic geography'. Journal of Political Economy 99, pp. 483–99.
(1991) 'Target zones and exchange rate dynamics'. Quarterly Journal of Economics 106 (3), pp. 669–82.
(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.
[edit] See also
Thomas Friedman
Robert Reich
[edit] References
^ a b Krugman, Paul (2009-07-29), The lessons of 1979-82, New York Times, http://krugman.blogs.nytimes.com/2009/07/30/the-lessons-of-1979-82/
^ a b Krugman, Paul (2009-09-23), The freshwater backlash (boring), New York Times, http://krugman.blogs.nytimes.com/2009/09/23/the-freshwater-backlash-boring/
^ See inogolo:pronunciation of Paul Krugman.
^ London School of Economics, Centre for Economic Performance, Lionel Robbins Memorial Lectures 2009: The Return of Depression Economics, accessed 19 August 2009
^ "About Paul Krugman". krugmanonline. W. W. Norton & Company. http://www.krugmanonline.com/about.php. Retrieved 2009-05-15.
^ Prospect Magazine Home Page http://www.prospectmagazine.co.uk/
^ a b c d Nobel Prize Committee, The Prize in Economic Sciences 2008
^ Note: Krugman modeled a 'preference for diversity' by assuming a CES utility function like that in A. Dixit and J. Stiglitz (1977), 'Monopolistic competition and optimal product diversity', American Economic Review 67.
^ a b Forbes, 13 October 2008, Paul Krugman, Nobel
^ Economist Rankings at IDEAS
^ a b Daniel B. Klein with Harika Anna Bartlett, "Left Out: A Critique of Paul Krugman Based on a Comprehensive Account of His New York Times Columns, 1997 through 2006", Econ Journal Watch 5:1, 109-133. January 2008. Accessed 07-04-09.
^ New York Times, The Conscience of a Liberal, accessed 6 August 2009
^ "In Search of a Man Selling Krug"
^ Associated Press, "Paul Krugman, LI Native, wins Nobel in economics",Newsday, October 14th, 2008
^ Paul Krugman, "Your questions answered", blog, January 10, 2003, retrieved December 19, 2007
^ Paul Krugman, "About my son", New York Times blog, December 19, 2007
^ Paul Krugman Gets a New Place to Hang His Hat and Nobel
^ Interview, U.S. Economist Krugman Wins Nobel Prize in Economics "PBS, Jim Lehrer News Hour", October 13, 2008, transcript retrieved October 14, 2008
^ New York Times, 6 August 2009, Up Front: Paul Krugman
^ a b Incidents From My Career, by Paul Krugman, Princeton University Press, Retrieved 10 December 2008
^ a b c d Princeton Weekly Bulletin, 20 October 2008, Biography of Paul Krugman, 98(7)
^ "Top 5% Authors, as of July 2009". Research Papers in Economics. 2009-07. http://ideas.repec.org/top/top.person.all.html. Retrieved 2009-08-19.
^ a b c d e f g Kristian Behrens, Frédéric Robert-Nicoud (2009), "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well-deserved", Papers in Regional Science, 88(2), pp467-489
^ Paul Krugman, 11 March 2008, New York Times blog, Economics: the final frontier
^ Note: Krugman modeled a 'preference for diversity' by assuming a CES utility function like that in Avinash Dixit and Joseph Stiglitz (1977), 'Monopolistic competition and optimal product diversity', American Economic Review 67.
^ P. Krugman (1981), 'Trade, accumulation, and uneven development', Journal of Development Economics 8, pp. 149-61.
^ 'Bold strokes: a strong economic stylist wins the Nobel', The Economist, Oct. 16, 2008.
^ a b In Praise of Cheap Labor by Paul Krugman, Slate, March 21, 1997
^ (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.")
^ Strategic trade policy and the new international economics, Paul R. Krugman (ed), The MIT Press, p.18, ISBN 978-0-262-61045-2
^ 'Honoring Paul Krugman' Economix blog of the New York Times, by Edward Glaeser, Oct. 13, 2008.
^ Krugman (1999) "Was it all in Ohlin?"
^ Krugman PR (2008), "Interview with the 2008 laureate in economics Paul Krugman", 6 December 2008. Stockholm, Sweden.
^ Sarno, Lucio; Mark P. Taylor (2002). The Economics of Exchange Rates. Cambridge University Press. pp. 245-264. ISBN 0521485843.
^ Craig Burnside, Martin Eichenbaum, and Sergio Rebelo (2008), 'Currency crisis models', New Palgrave Dictionary of Economics, 2nd ed.
^ "The International Finance Multiplier", P. Krugman, Oct 2008
^ "Global Economic Integration and Decoupling", Donald L. Kohn, speech at the International Research Forum on Monetary Policy, Frankfurt, Germany, 06-26-2008; from website for the Board of Governors for the Federal Reserve System. Access date 08-20-2009, June 26, 2008
^ "Decoupling Demystified", Nayan Chanda, YaleGlobal Online, orig. from Businessworld Feb 8, 2008 [1]
^ "The myth of decoupling," Sebastien Walti, Feb 2009
^ "The International Finance Multiplier", The Conscience of a Liberal (blog), 10-05-2008. Access date 09-20-2009
^ Andrew Leonard, "Krugman: 'We are all Brazilians now'", How the World Works, 10-07-2008
^ "Krugman: The International Finance Multiplier", Mark Thoma, Economist's View, 10-06-2008, [2]
^ "The geography of finance: after the storm", R O'Brien, A Keith, Cambridge Journal of Regions, Economy and Society, June 2009 2(2):245-265 doi:10.1093/cjres/rsp015 [3]
^ "Financial Deleveraging and the International Transmission of Shocks", research memo, MB Devereux, J Yetman, 05-19-2009.
^ Escaith, Hubert and Gonguet, Fabien, International Trade and Real Transmission Channels of Financial Shocks in Globalized Production Networks (May 22, 2009). [4]
^ KS Imai, R Gaiha, G Thapa, "Finance, Growth, Inequality and Hunger in Asia: Evidence from Country Panel Data in 1960-2006", University of Manchester Economics Discussion Papers 12-16-2008
^ "Global Imbalances and Global Governance", Philip Lane, Center of Economic Policy Research, European Commission, 02-17-2009
^ Har, Clement, Nagar, Venky and Petacchi, Paolo, "The Effect of Rational Capital Markets versus Regulatory Enforcement on the Valuation of Innovative Financial Assets" (March 2009). Paolo Baffi Centre Research Paper No. 2009-40. [5]
^ The 2008/2009 World Economic Crisis: What It Means for U.S. Agriculture, M. Shane, Economic Research Service, USDA Outlook, 03-29-2009 [6]
^ "Financial crisis in Asia and the Pacific Region: Its genesis, severity and impact on poverty and hunger", KS Imai, R Gaiha, G Thapa, University of Manchester Economics Discussion Papers EDP-0810 11-11-2008 [7]
^ Japanese fixed income markets: money, bond and interest rate derivatives, Jonathan Batten, Thomas A. Fetherston, Peter G. Szilagyi (eds.) Elsevier Science, 30 Nov 2006, ISBN 978-0444520203 p.137
^ Ben Bernanke, "Japanese Monetary Policy: a case of self-induced paralysis?", in Japan's financial crisis and its parallels to U.S. experience, Ryōichi Mikitani, Adam Posen (ed), Institute for International Economics, Oct 2000 ISBN 978-0881322897 p.157
^ "Some Observations on the Return of the Liquidity Trap", Scott Sumner, Cato Journal, Vol. 21, No. 3 (Winter 2002).
^ Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Lance Taylor, Harvard University Press, p.159: "Kregel (2000) points out that there are at least three theories of the liquidity trap in the literature--Keynes own analyses [...] Hicks' [in] 1936 and 1937 [...] and a view that can be attributed to Fisher in the 1930s and Paul Krugman in latter days"
^ Paul Krugman's Japan page
^ "It's Baaack: Japan's Slump and the Return of the Liquidity Trap", Paul R. Krugman, Kathryn M. Dominquez, Kenneth Rogoff. Brookings Papers on Economic Activity, Vol. 1998, No. 2 (1998), pp. 137-205
^ a b Krugman, Paul (2000), "Thinking About the Liquidity Trap", Journal of the Japanese and International Economies, v.14, no.4, Dec 2000, pp 221-237.
^ "Reply to Nelson and Schwartz", Paul Krugman, Journal of Monetary Economics, v.55, no.4, pp 857-860 05-23-2008
^ Krugman, Paul (1999). "The Return of Depression Economics", p.70-77. W. W. Norton, New York ISBN 039304839X
^ Congdon, Tim (2005). "Money and Asset Prices in Boom and Bust", p.104. The Institute of Economic Affairs, London. ISBN 025536570
^ "Japan's Trap", May 2008. [8] Access date 08-22-2009
^ "Further Notes on Japan's Liquidity Trap", Paul Krugman
^ Restoring Japan's economic growth, Adam Posen, Petersen Institute, 1 September 1998, ISBN 978-0881322620 , p.123,
^ "What is wrong with Japan?", Nihon Keizai Shinbun, 1997 [9]
^ Krugman, Paul. "Stay the Course". www.nytimes.com. http://www.nytimes.com/2009/06/15/opinion/15krugman.html. Retrieved 2009-08-15.
^ "Some Reasons Why a New Crisis Needs a New Paradigm of Economic Thought", Keiichiro Kobayashi, RIETI Report No.108, Research Institute of Economy, Trade & Industry (Japan), 07-31-2009
^ Catherine Rampell (October 13, 2008). "Paul Krugman Wins Economics Nobel - Economix Blog - NYTimes.com". Economix.blogs.nytimes.com. http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?em. Retrieved 2008-10-13.
^ Prize Committee of the Royal Swedish Academy of Sciences, 13 October 2008, Scientific background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008, Trade and Geography – Economies of Scale, Differentiated Products and Transport Costs
^ Justin Lahart (October 14, 2008). "Paul Krugman Is Awarded Nobel in Economics". Wall Street Journal. http://online.wsj.com/article/SB122389602110728309.html. Retrieved 2009-10-06.
^ a b c The Economist, 13 November 2003, Paul Krugman, one-handed economist
^ ""The Great Unraveling: Losing Our Way in the New Century"". Powell's Books. http://www.powells.com/biblio/61-0393326055-0. Retrieved 2007-11-22.
^ a b Krugman, Paul, Rolling Stone. 14 December 2006, "The Great Wealth Transfer"
^ a b Nobelpristagaren i ekonomi 2008: Paul Krugman, speech by Paul Krugman (accessed December 26, 2008) 00:43 "The title of The Conscience of a Liberal [...] is a reference to a book published almost 50 years ago in the United States called The Conscience of a Conservative by Barry Goldwater. That book is often taken to be the origin, the start, of a movement that ended up dominating U.S. politics that reached its first pinnacle under Ronald Reagan and then reached its full control of the U.S. government for most of the last eight years."
^ a b c Michael Tomasky, The New York Review of Books, November 22, 2007, The Partisan
'^ Paul Krugman. The Conscience of a Liberal, 2007, W.W. Norton & Co. ISBN 0393060691 p. 182
^ Conscience of a Liberal, p.102
^ op. cit. p.108
^ Oct 17 2007- Krugman On Healthcare, Tax Cuts, Social Security, the Mortgage Crisis and Alan Greenspan, in response to Alan Greenspan's Sept 24 appearance with Naomi Klein on Democracy Now!
^ Malefactors of Megawealth David M. Kennedy
^ a b J. Peter Neary (2009), "Putting the 'New' into New Trade Theory: Paul Krugman's Nobel Memorial Prize in Economics", Scandinavian Journal of Economics, 111(2), pp217-250
^ a b c Hirsh, Michael (4 March 1996). "A Nobel-Bound Economist Punctures the CW--and Not a Few Big-Name Washington Egos". Newsweek. http://www.newsweek.com/id/101625. Retrieved 2008-10-13.
^ "China the financial nexus" - Krugman
^ a b c d e f g Confessore, Nicholas (December 2002). "Comparative Advantage". Washington Monthly. http://www.washingtonmonthly.com/features/2001/0212.confessore.html. Retrieved 2007-02-05.
^ New Statesman, 16 February 2004, NS Profile - Paul Krugman
^ Okrent, Daniel (2005-05-22). "I Meant to Write About but Never Did". New York Times. http://www.nytimes.com/2005/05/22/weekinreview/22okrent.html. Retrieved 2009-08-16.
^ a b c Evan Thomas, Newsweek, April 6, 2009, "Obama's Nobel Headache"
^ Krugman, Paul (December 1994). "The Myth of Asia's Miracle". Foreign Affairs (www.foreignaffairs.org). http://www.foreignaffairs.org/19941101faessay5151/paul-krugman/the-myth-of-asia-s-miracle.html. Retrieved 2008-12-26.
^ Van Den Berg, Hendrik; Joshua J. Lewer (2006). International Trade and Economic Growth. M.E. Sharpe. pp. 98-105. ISBN 978-0765618030.
^ Krugman, Paul (1998-09-07). "Saving Asia: It's Time To Get Radical The IMF plan not only has failed to revive Asia's troubled economies but has worsened the situation. It's now time for some painful medicine.". Fortune. http://money.cnn.com/magazines/fortune/fortune_archive/1998/09/07/247884/index.htm. Retrieved 2009-07-12.
^ "An Open Letter to Prime Minister Mahathir", Sept 1 1998
^ "Malaysia's Currency Controls: What They Mean and Whether The Will Work", V V Bhanoji Rao, Economic and Political Weekly, 10 Oct 1998.
^ Malaysia's economy: The Sinatra Principle, Andrew Walker, BBC News, 15 November, 1999.
^ a b Landler, Mark (1999-09-04). "Malaysia Wins Its Economic Gamble". New York Times (New York Times). http://www.nytimes.com/library/world/asia/090499malaysia-econ.html. Retrieved 2009-07-15.
^ The Capitalist Manifesto, Fareed Zakaria, Newsweek, 13 June, 2009.
^ "Capital Control Freaks: How Malaysia got away with economic heresy", Slate, Sept. 27, 1999. Access date 08-25-2009
^ Krugman, Paul (2003-03-21). "Who Lost the U.S. Budget?". New York Times (New York Times). http://www.nytimes.com/2003/03/21/opinion/21KRUG.html. Retrieved 2009-06-24.
^ Dana, Will (2003-03-23). "Voodoo Economics". Rolling Stone (rollingstone.com).
^ Lehrke, Dylan Lee (2003-10-09). "Krugman blasts Bush". The Daily of the University of Washington (dailyuw.com). http://dailyuw.com/2003/10/9/krugman-blasts-bush/. Retrieved 2009-08-01.
^ a b Krugman, Paul (2001-10-07). "Fuzzy Math Returns". New York Times (New York Times). http://www.nytimes.com/2001/10/07/opinion/07KRUG.html. Retrieved 2009-08-01.
^ Krugman, Paul (2005-08-29). "Greenspan and the Bubble". New York Times (New York Times). http://www.nytimes.com/2005/08/29/opinion/29krugman.html. Retrieved 2008-12-07.
^ Krugman, Paul (2008-03-24). "Financial Crisis Should Be at Center of Election Debate". Spiegel Online (Spiegel). https://www.spiegel.de/international/0,1518,543074,00.html. Retrieved 2009-07-09.
^ Krugman, Paul (2008-03-24). "Taming the Beast". New York Times (New York Times). http://www.nytimes.com/2008/03/24/opinion/24krugman.html. Retrieved 2009-07-09.
^ Krugman, Paul (2008-03-29). "The Gramm connection". New York Times (New York Times). http://krugman.blogs.nytimes.com/2008/03/29/the-gramm-connection/. Retrieved 2009-06-24.
^ Lerer, Lisa (2008-03-28). "McCain guru linked to subprime crisis". Politico. http://www.politico.com/news/stories/0308/9246.html. Retrieved 2009-06-24.
^ Paul Krugman. Behind the Curve, New York Times, Mar 9, 2009
^ a b c d e f Paul Krugman, "My Connection With Enron, One More Time", Retrieved October 27, 2008.
^ White House Says Economics Adviser Saw Little Risk on Enron
^ "Enron Follies", Rich Karlgaard, Forbes magazine, 02-13-2002.
^ "Andrew Sullivan's selective Enron outrage", Eric Boehlert, Salon, 01-31-2002
^ Howard Kurtz, ... And the Enron Pundits, 01-30-2002.
^ Paul Krugman, The Ascent of E-Man", Fortune magazine, May 1999.
^ Paul Krugman, "Me and Enron". Retrieved March 28, 2007.
^ "California Screaming", op-ed column, New York Times, 12-10-2002.
^ Krugman, Paul (2009-10-16), Samuel Brittan’s recipe for recovery, New York Times, http://krugman.blogs.nytimes.com/2009/10/16/samuel-brittans-recipe-for-recovery/
^ Krugman, Paul. (2009-9-2). "How Did Economists Get It So Wrong?". New York Times. Retrieved 2009-10-09.
^ Krugman, Paul (2009-05-19), Actually existing Minsky, New York Times, http://krugman.blogs.nytimes.com/2009/05/19/actually-existing-minsky/
^ Rezende, Felipe C. (2009-08-18), Keynes's Relevance and Krugman's Economics, http://neweconomicperspectives.blogspot.com/2009/08/keyness-relevance-and-krugmans.html
^ Reckonings; A Rent Affair, by Paul Krugman, The New York Times, June 7, 2000
^ Living Wage: What It Is and Why We Need It book review by Paul Krugman, Washington Monthly, September 1, 1998
^ Ricardo's difficult idea
^ True Blue Americans, by Paul Krugman, The New York Times, May 7, 2002
^ Driving Under the Influence, by Paul Krugman, The New York Times, June 25, 2000
^ A Failed Mission, by Paul Krugman, The New York Times, February 4, 2003
^ Reckonings; Pursuing Happiness, by Paul Krugman, The New York Times, March 29, 2000
^ Reckonings; Blessed Are the Weak, by Paul Krugman, The New York Times, May 3, 2000
^ Dev Gupta, Satya (1997). The political economy of globalization. Springer. pp. 61.
^ Krugman, Paul R. (1987). "Is Free Trade Passe?". The Journal of Economic Perspectives 1 (2): 131–144. http://www.jstor.org/pss/1942985.
^ "Republicans and Race", Paul Krugman, New York Times, 11-19-2007
^ "The Town Hall Mob", Paul Krugman, New York Times, 08-07-2009
^ [The Conscience of a Liberal: Book Review], William Amponsah, Savannah Daily News, 12-03-2007
^ Jay Parini, The Guardian, 22 March 2008, Review: The Conscience of a Liberal
^ "Loury's Exodus: A profile of Glenn Loury", Robert S. Boynton, The New Yorker, 05-01-1995
^ "Glenn Loury's Round Trip: The travails and temptations of a black intellectual", Paul Krugman, Slate, 05-14-1998. At PK MIT site, access date 08-19-2009
^ A critical analysis of the contributions of notable black economists, Kojo A. Quartey, Ashgate Publishing, Sep 2000 ISBN 978-1840141474
^ Mwakikagile, Godfrey (2006). 'Black Conservatives in the United States. New Africa Press. pp. 117. ISBN 978-0980258707.
^ http://www.nytimes.com/2008/10/13/opinion/13krugman.html, 'Gordon Does Good', Retrieved 08 June 2009
^ http://www.nytimes.com/2009/06/08/opinion/08krugman.html 'Gordon the Unlucky', Retrieved 08 June 2009
^ Avinash Dixit, The Journal of Economic Perspectives, Vol. 7, No. 2 (Spring, 1993), pp. 173-188, In Honor of Paul Krugman: Winner of the John Bates Clark Medal, Retrieved March 28, 2007.
^ Mother Jones: Paul Krugman., August 7, 2005. Retrieved March 28, 2007.
^ Paul Krugman, 2004. Retrieved March 28, 2007.
^ "Nobel Prize in Economics". Swedish Academy. http://nobelprize.org/nobel_prizes/economics/laureates/2008/. Retrieved 2008-10-13.
[edit] External links
http://en.wikipedia.org/wiki/Paul_Krugman
Paul Robin Krugman (born February 28, 1953) is an American economist, liberal columnist and author. He is Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs, Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times.[4][5] In 2008, Krugman won the Nobel Memorial Prize in Economics for his contributions to New Trade Theory and New Economic Geography. He was voted sixth in Prospect Magazine's 2005 global poll of the world's top 100 intellectuals.[6]
The Nobel Prize Committee stated that Krugman's main contribution had been to explain 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.[7] Krugman's work on international economics, including trade theory, economic geography, and international finance[8][9] has established him as one of the most influential economists in the world according to IDEAS/RePEc.[10] Krugman is also known in academia for his work on liquidity traps and on currency crises.
As of 2006, Krugman had written or edited more than 25 books, 40 scholarly articles and 750 columns at The New York Times dealing with current economic and political issues.[11] Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld is a standard introductory textbook on international economics. He also writes on political and economic topics for the general public, as well as on 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".[12]
Personal life
Krugman is the son of David and Anita Krugman and the grandson of Jewish immigrants from Brest-Litovsk.[13] He grew up on Long Island in New York and graduated from John F. Kennedy High School in Bellmore.[14] He is married to Robin Wells, his second wife, an academic economist who has collaborated on textbooks with Krugman. They have no children.[15][16] They currently live in New York.[17]
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.[18][19]
[edit] Academic career
Krugman earned his B.A. in economics from Yale University in 1974 and his Ph.D. 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.[20] 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, as well as the Council on Foreign Relations. He has been a research associate at the National Bureau of Economic Research since 1979.[21]
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 12th most influential economist in the world as of July 2009 based on his academic contributions.[22] Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld, is a standard introductory textbook on international economics. 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 to analyze the impact of economies of scale, combined with the assumption that consumers appreciate diversity, on international trade and on the location of economic activity.[7] 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."[23]
On a lighter note, 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".[24]
[edit] 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 poor country exporting agricultural goods to a rich country in exchange for industrial products. 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.[25] 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. Krugman's model also involved introducing transportation costs, a key feature in producing the "home market effect" which would later become key for Krugman's work on the new economic geography. The home market effect "states that, ceteris paribus, the country with the larger demand for a good will, at equilibrium, produce a more than proportionate share of that good and be a net exporter of it."[23] The home market effect was an unexpected result, and Krugman initially questioned it, but ultimately concluded that the mathematics of the model was correct.[23]
Many models of international trade now follow Krugman's lead, incorporating economies of scale in production and a preference for diversity in consumption.[7] This way of modeling trade has come to be called New Trade Theory.[23]
When there are economies of scale in production, it is possible that countries may become 'locked in' to disadvantageous patterns of trade.[26] Nonetheless, trade remains beneficial in general, even between relatively 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.[27] Krugman has usually been supportive of free trade and globalization[28][29]. 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.[30]
New economic geography
It took an interval of eleven years, but ultimately Krugman's work on New Trade Theory (NTT) led quite naturally 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.[31]. 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."[32] This would become Krugman's most-cited academic paper: by early 2009, it had 857 citations, more than double his second-ranked paper.[23] Krugman called the paper "the love of my life in academic work."[33]
Where in NTT Krugman had developed the "home market effect", that same effect features in NEG. NEG explains agglomeration "as the outcome of the interaction of increasing returns, trade costs and factor price differences."[23] 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, Krugman's trade theory 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 also have higher levels of income.[7][9]
International finance
Krugman has also been influential in the field of international finance. In 1979 he published a paper on currency crises in the Journal of Money, Credit, and Banking showing 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,[34][35] and it is his second-most-cited paper (457 citations as of early 2009).[23]
In response to the global financial crisis of 2008, Krugman proposed, in an informal "mimeo" style of publication,[36] 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.[37][38][39] He first announced that he was working on such a model on his blog, on Oct 5th, 2008.[40] Within days of its appearance, it was being discussed on some popular economics-oriented blogs.[41][42] The note was not long after being cited in papers (draft and published) by other economists,[43][44][45][46][47][48][49][50] even though it had not itself been through ordinary peer review processes.
[edit] Macroeconomics and fiscal policy
Krugman has done much to revive discussion of the liquidity trap as a topic in economics.[51][52][53][54] 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.[55][56][57] The debate he started at that time over liquidity traps and what policies best address them continues in the economics literature.[58]
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 stagflation.[59] Tim Congdon however argued that Krugman was describing a narrow liquidity trap, in which the short-term interest rate in the money markets cannot be reduced by increases in the monetary base, while Keynes had been describing a broader trap where increases in the broadly defined quantity of money could not reduce the yield on government bonds; since increases in broad money in Japan in the stagflatory period were slow, Krugman had no evidence to claim that Japan was in a genuine Keynesian liquidity trap.[60]
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."[57] The proposal appeared first in a web posting on his academic site.[61] 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.[62][63][64]
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.[65] 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.[66]
[edit] Nobel Memorial Prize
Krugman was awarded the Nobel Memorial Prize in Economic Sciences, 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.[67] 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."[68] The prize was awarded before the U.S. presidential elections raising speculation and criticism that political considerations affected the Nobel committee's decision. Economist Gregory Mankiw disputed this, saying, "I see no evidence that the Nobel committee in economics has been politicized at all."[69]
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. Taken as a whole, it was a scathing attack on the George W. Bush 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 the Iraq war — were in the long run unsustainable, and would eventually generate a major economic crisis. The book was a best-seller.[70][71][72]
In 2007, Krugman published The Conscience of a Liberal, whose title references Barry Goldwater's Conscience of a Conservative.[73] 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. 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 played a much greater role than commonly thought, 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 implementing policies that greatly 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".[74][75] In this connection, he said that Ronald Reagan had been able to use the so-called "Southern Strategy" to "signal sympathy for racism without saying anything overtly racist,"[76] citing as an example Reagan's coining of the term "welfare queen".[77]
In his book, Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense.[78] 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."[74] 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".[79]
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.
[edit] Commentator
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."[80] 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."[80] Krugman has been described as the most controversial economist in his generation[81][82] and according to Michael Tomasky since 1992 he has moved "from being a center-left scholar to being a liberal polemicist."[74]
From the mid-1990s onwards, Krugman wrote for Fortune (1997 - 99)[21] and Slate (1996 - 99),[21] 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.[83]
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.[81] 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." [83][84]
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."[83] 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...."[83] Krugman accused Bush of repeatedly misrepresenting his proposals, and criticized the proposals themselves.[83] 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."[83] 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."[83]
Krugman's New York Times columns have drawn criticisms 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," referencing critics who felt that "his relentless partisanship is getting in the way of his argument" and citing what it claimed were errors of economic and political reasoning in Krugman's columns.[70] A 2008 commentary by economist Daniel B. Klein in Econ Journal Watch criticizes Krugman's columns and argues 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."[11] Daniel Okrent, a former New York Times ombudsman, in his farewell column, criticized Paul Krugman for what he claimed (without supplying details) 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."[85][86]
Krugman also has a blog, named Conscience of a Liberal, in which he discusses economics, politics, and policy.
[edit] 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.[87] His article 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 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.[88]
During the 1997 Asian financial crisis, Krugman advocated currency controls as a way to mitigate the crisis, writing in a Fortune (magazine) article, "Is there any way out? Yes, there is, but it is a solution so unfashionable, so stigmatized, that hardly anyone has dared suggest it. The unsayable words are 'exchange controls'."[89] In an open letter to Malaysian Prime Minister Mahathir bin Mohamad, after controls were adopted, he wrote that because of his Fortune article, he "couldn't deny some responsibility" for Malaysia's decision.[90][91] It was later reported that he thought the article's publication was ill-judged.[92] 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.[93] South Korea and Thailand, two countries that did not restrict currency flows, recovered more quickly than Malaysia.[93] All countries rebounded from the crisis within two years.[94] Krugman later acknowledged that the controls might not have been necessary at the time they were applied, but nevertheless insisted that "Malaysia has proved a point—namely, that controlling capital in a crisis is at least feasible."[95]
[edit] U.S. economic policies
In the early 2000s, Krugman repeatedly criticized the Bush tax cuts, both before and after they were enacted. Krugman stated that the tax cuts enlarged the budget deficit without improving the economy, and that they enriched the wealthy – worsening income distribution in the US.[72][96][97][98][99] 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.[99]
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."[100]
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.[101][102][103][104]
Krugman has been a prominent critic of the Obama administration's economic policies, in particular its efforts to prop up the US financial system, which he considers unsustainable in its present form.[86] Krugman has criticized the Obama stimulus plan as inadequate 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."[105]
[edit] Enron consultancy
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 New York Times rules regarding conflicts of interest, when he accepted the Times's offer to become an op-ed columnist.[106] 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.[106] 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.[107]
When the story of Enron's corporate scandals broke, Krugman was accused of unethical journalism, specifically of having a conflict of interest.[108][109][110] Some of his critics claimed that "The Ascent of E-man," an article Krugman wrote for Fortune Magazine[111] about the rise of the market as illustrated by Enron's energy trading, was biased by Krugman's earlier consulting work for them.[106] 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."[106] Krugman noted his previous relationship with Enron in that article and in other articles he wrote on the company.[106][112] Krugman was one of the first to argue that deregulation of the California energy market had led to illegal market-manipulation by Enron and other energy companies.[106][113]
[edit] Economic views
This section requires expansion.
Krugman identifies as a Keynesian[114] and a saltwater economist,[1] and he has criticized the freshwater school on macroeconomics.[2][115]
In the wake of the 2007-2009 financial crisis he has remarked that he is "gravitating towards a Keynes-Fisher-Minsky view of macro."[116] Post-Keynesian observers cite commonalities between Krugman's views and those of the Post-Keynesian school.[117]
[edit] Political views
Krugman describes himself as liberal. He has explained that he views the term "liberal" in the American context to mean "more or less what social democratic means in Europe."[73] A 2009 Newsweek article 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.[86] In 1996, Newsweek 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."[81]
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,[118] argued that "sweatshops" are preferable to unemployment,[28] challenged minimum wage and living wage laws,[119] likened the opposition against free trade and globalization to the opposition against evolution via natural selection,[120] opposed farm subsidies[121] and mandates, subsidies, and tax breaks for ethanol,[122] questioned NASA's manned space flights,[123] and written against some aspects of European labor market regulation.[124][125] 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'."[126][127]
On US race relations, Krugman has repeatedly criticized the Republican Party leadership for what he sees as a strategic (but largely tacit) reliance on racial divisions.[128][129][130] In his Conscience of a Liberal, he wrote
The changing politics of race made it possible for a revived conservative movement, whose ultimate goal was to reverse the achievements of the New Deal, to win national elections – even though it supported policies that favored the interests of a narrow elite over those of middle- and lower-income Americans.[131]
Krugman also once wrote in defense of conservative economist Glenn Loury that Loury, in defiance of many African-American political leaders,[132] had clearly seen and articulated 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."[133][134][135]
His appointment in the Reagan administration, he has stated in an autobiographical essay, was not expected or fitting. "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."[20]
Krugman has praised Gordon Brown, the British Prime Minister, asserting that he "defined the character of the worldwide [financial] rescue effort" and has since urged British voters not to support the opposition Conservative Party, arguing their Party Leader David Cameron "has had little to offer other than to raise the red flag of fiscal panic."[136][137]
[edit] Awards
1991, American Economic Association, John Bates Clark Medal.[138] 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'.[70]
1992, Fellow of the American Academy of Arts and Sciences (AAAS).[21]
1995, Adam Smith Award of the National Association for Business Economics
2000, H.C. Recktenwald Prize in Economics, awarded by University of Erlangen-Nuremberg in Germany.
2002, Editor and Publisher, Columnist of the Year.[139]
2004, Fundación Príncipe de Asturias (Spain), Prince of Asturias Awards in Social Sciences.[140]
2004, Doctor of Humane Letters honoris causa, Haverford College[10]
2008, Nobel Memorial Prize in Economics (formally The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) for Krugman's contributions to New Trade Theory.[141] He became the twelfth John Bates Clark Medal winner to be awarded the Nobel Memorial Prize.
[edit] Published works
[edit] Academic books (authored or coauthored)
The Spatial Economy - Cities, Regions and International Trade (July 1999), with Masahisa Fujita and Anthony Venables. MIT Press, ISBN 0262062046
The Self Organizing Economy (February 1996), ISBN 1557866988
EMU and the Regions (December 1995), with Guillermo de la Dehesa. ISBN 1567080383
Development, Geography, and Economic Theory (Ohlin Lectures) (September 1995), ISBN 0262112035
Foreign Direct Investment in the United States (3rd Edition) (February 1995), with Edward M. Graham. ISBN 0881322040
World Savings Shortage (September 1994), ISBN 0881321613
What Do We Need to Know About the International Monetary System? (Essays in International Finance, No 190 July 1993) ISBN 0881650978
Currencies and Crises (June 1992), ISBN 0262111659
Geography and Trade (Gaston Eyskens Lecture Series) (August 1991), ISBN 0262111594
The Risks Facing the World Economy (July 1991), with Guillermo de la Dehesa and Charles Taylor. ISBN 1567080731
Has the Adjustment Process Worked? (Policy Analyses in International Economics, 34) (June 1991), ISBN 0881321168
Rethinking International Trade (April 1990), ISBN 0262111489
Trade Policy and Market Structure (March 1989), with Elhanan Helpman. ISBN 0262081822
Exchange-Rate Instability (Lionel Robbins Lectures) (November 1988), ISBN 0262111403
Adjustment in the World Economy (August 1987) ISBN 1567080235
Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1985), with Elhanan Helpman. ISBN 0262081504
[edit] Academic books (edited or coedited)
Currency Crises (National Bureau of Economic Research Conference Report) (September 2000), ISBN 0226454622
Trade with Japan : Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1995), ISBN 0226454592
Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April, 1994), co-edited with Alasdair Smith. ISBN 0226454606
Exchange Rate Targets and Currency Bands (October 1991), co-edited with Marcus Miller. ISBN 0521415330
Strategic Trade Policy and the New International Economics (January 1986), ISBN 0262111128
[edit] Economics textbooks
Economics: European Edition (Spring 2007), with Robin Wells and Kathryn Graddy. ISBN 0716799561
Macroeconomics (February 2006), with Robin Wells. ISBN 0716767635
Economics (December 2005), with Robin Wells. ISBN 1572591501
Microeconomics (March 2004), with Robin Wells. ISBN 0716759977
International Economics: Theory and Policy, with Maurice Obstfeld. 7th Edition (2006), ISBN 0321293835; 1st Edition (1998), ISBN 0673521869
[edit] Books for a general audience
The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0393071014
An updated version of his previous work.
The Conscience of a Liberal (October 2007) ISBN 0393060691
The Great Unraveling: Losing Our Way in the New Century (September 2003) ISBN 0393058506
A book of his 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 0393050629
The Return of Depression Economics (May 1999) ISBN 039304839X
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 0393071014
The Accidental Theorist and Other Dispatches from the Dismal Science (May 1998) ISBN 0393046389
Essay collection, primarily from Krugman's writing for Slate.
Pop Internationalism (March 1996) ISBN 0262112108
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 0393312925
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 026211156X
A "briefing book" on the major policy issues around the economy.
Revised and Updated, January 1994, ISBN 0262610922
Third Edition, August 1997, ISBN 0262112248
[edit] Selected academic articles
(1996) 'Are currency crises self-fulfilling?' NBER Macroeconomics Annual 11, pp. 345–78.
(1991) 'Increasing returns and economic geography'. Journal of Political Economy 99, pp. 483–99.
(1991) 'Target zones and exchange rate dynamics'. Quarterly Journal of Economics 106 (3), pp. 669–82.
(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.
[edit] See also
Thomas Friedman
Robert Reich
[edit] References
^ a b Krugman, Paul (2009-07-29), The lessons of 1979-82, New York Times, http://krugman.blogs.nytimes.com/2009/07/30/the-lessons-of-1979-82/
^ a b Krugman, Paul (2009-09-23), The freshwater backlash (boring), New York Times, http://krugman.blogs.nytimes.com/2009/09/23/the-freshwater-backlash-boring/
^ See inogolo:pronunciation of Paul Krugman.
^ London School of Economics, Centre for Economic Performance, Lionel Robbins Memorial Lectures 2009: The Return of Depression Economics, accessed 19 August 2009
^ "About Paul Krugman". krugmanonline. W. W. Norton & Company. http://www.krugmanonline.com/about.php. Retrieved 2009-05-15.
^ Prospect Magazine Home Page http://www.prospectmagazine.co.uk/
^ a b c d Nobel Prize Committee, The Prize in Economic Sciences 2008
^ Note: Krugman modeled a 'preference for diversity' by assuming a CES utility function like that in A. Dixit and J. Stiglitz (1977), 'Monopolistic competition and optimal product diversity', American Economic Review 67.
^ a b Forbes, 13 October 2008, Paul Krugman, Nobel
^ Economist Rankings at IDEAS
^ a b Daniel B. Klein with Harika Anna Bartlett, "Left Out: A Critique of Paul Krugman Based on a Comprehensive Account of His New York Times Columns, 1997 through 2006", Econ Journal Watch 5:1, 109-133. January 2008. Accessed 07-04-09.
^ New York Times, The Conscience of a Liberal, accessed 6 August 2009
^ "In Search of a Man Selling Krug"
^ Associated Press, "Paul Krugman, LI Native, wins Nobel in economics",Newsday, October 14th, 2008
^ Paul Krugman, "Your questions answered", blog, January 10, 2003, retrieved December 19, 2007
^ Paul Krugman, "About my son", New York Times blog, December 19, 2007
^ Paul Krugman Gets a New Place to Hang His Hat and Nobel
^ Interview, U.S. Economist Krugman Wins Nobel Prize in Economics "PBS, Jim Lehrer News Hour", October 13, 2008, transcript retrieved October 14, 2008
^ New York Times, 6 August 2009, Up Front: Paul Krugman
^ a b Incidents From My Career, by Paul Krugman, Princeton University Press, Retrieved 10 December 2008
^ a b c d Princeton Weekly Bulletin, 20 October 2008, Biography of Paul Krugman, 98(7)
^ "Top 5% Authors, as of July 2009". Research Papers in Economics. 2009-07. http://ideas.repec.org/top/top.person.all.html. Retrieved 2009-08-19.
^ a b c d e f g Kristian Behrens, Frédéric Robert-Nicoud (2009), "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well-deserved", Papers in Regional Science, 88(2), pp467-489
^ Paul Krugman, 11 March 2008, New York Times blog, Economics: the final frontier
^ Note: Krugman modeled a 'preference for diversity' by assuming a CES utility function like that in Avinash Dixit and Joseph Stiglitz (1977), 'Monopolistic competition and optimal product diversity', American Economic Review 67.
^ P. Krugman (1981), 'Trade, accumulation, and uneven development', Journal of Development Economics 8, pp. 149-61.
^ 'Bold strokes: a strong economic stylist wins the Nobel', The Economist, Oct. 16, 2008.
^ a b In Praise of Cheap Labor by Paul Krugman, Slate, March 21, 1997
^ (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.")
^ Strategic trade policy and the new international economics, Paul R. Krugman (ed), The MIT Press, p.18, ISBN 978-0-262-61045-2
^ 'Honoring Paul Krugman' Economix blog of the New York Times, by Edward Glaeser, Oct. 13, 2008.
^ Krugman (1999) "Was it all in Ohlin?"
^ Krugman PR (2008), "Interview with the 2008 laureate in economics Paul Krugman", 6 December 2008. Stockholm, Sweden.
^ Sarno, Lucio; Mark P. Taylor (2002). The Economics of Exchange Rates. Cambridge University Press. pp. 245-264. ISBN 0521485843.
^ Craig Burnside, Martin Eichenbaum, and Sergio Rebelo (2008), 'Currency crisis models', New Palgrave Dictionary of Economics, 2nd ed.
^ "The International Finance Multiplier", P. Krugman, Oct 2008
^ "Global Economic Integration and Decoupling", Donald L. Kohn, speech at the International Research Forum on Monetary Policy, Frankfurt, Germany, 06-26-2008; from website for the Board of Governors for the Federal Reserve System. Access date 08-20-2009, June 26, 2008
^ "Decoupling Demystified", Nayan Chanda, YaleGlobal Online, orig. from Businessworld Feb 8, 2008 [1]
^ "The myth of decoupling," Sebastien Walti, Feb 2009
^ "The International Finance Multiplier", The Conscience of a Liberal (blog), 10-05-2008. Access date 09-20-2009
^ Andrew Leonard, "Krugman: 'We are all Brazilians now'", How the World Works, 10-07-2008
^ "Krugman: The International Finance Multiplier", Mark Thoma, Economist's View, 10-06-2008, [2]
^ "The geography of finance: after the storm", R O'Brien, A Keith, Cambridge Journal of Regions, Economy and Society, June 2009 2(2):245-265 doi:10.1093/cjres/rsp015 [3]
^ "Financial Deleveraging and the International Transmission of Shocks", research memo, MB Devereux, J Yetman, 05-19-2009.
^ Escaith, Hubert and Gonguet, Fabien, International Trade and Real Transmission Channels of Financial Shocks in Globalized Production Networks (May 22, 2009). [4]
^ KS Imai, R Gaiha, G Thapa, "Finance, Growth, Inequality and Hunger in Asia: Evidence from Country Panel Data in 1960-2006", University of Manchester Economics Discussion Papers 12-16-2008
^ "Global Imbalances and Global Governance", Philip Lane, Center of Economic Policy Research, European Commission, 02-17-2009
^ Har, Clement, Nagar, Venky and Petacchi, Paolo, "The Effect of Rational Capital Markets versus Regulatory Enforcement on the Valuation of Innovative Financial Assets" (March 2009). Paolo Baffi Centre Research Paper No. 2009-40. [5]
^ The 2008/2009 World Economic Crisis: What It Means for U.S. Agriculture, M. Shane, Economic Research Service, USDA Outlook, 03-29-2009 [6]
^ "Financial crisis in Asia and the Pacific Region: Its genesis, severity and impact on poverty and hunger", KS Imai, R Gaiha, G Thapa, University of Manchester Economics Discussion Papers EDP-0810 11-11-2008 [7]
^ Japanese fixed income markets: money, bond and interest rate derivatives, Jonathan Batten, Thomas A. Fetherston, Peter G. Szilagyi (eds.) Elsevier Science, 30 Nov 2006, ISBN 978-0444520203 p.137
^ Ben Bernanke, "Japanese Monetary Policy: a case of self-induced paralysis?", in Japan's financial crisis and its parallels to U.S. experience, Ryōichi Mikitani, Adam Posen (ed), Institute for International Economics, Oct 2000 ISBN 978-0881322897 p.157
^ "Some Observations on the Return of the Liquidity Trap", Scott Sumner, Cato Journal, Vol. 21, No. 3 (Winter 2002).
^ Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Lance Taylor, Harvard University Press, p.159: "Kregel (2000) points out that there are at least three theories of the liquidity trap in the literature--Keynes own analyses [...] Hicks' [in] 1936 and 1937 [...] and a view that can be attributed to Fisher in the 1930s and Paul Krugman in latter days"
^ Paul Krugman's Japan page
^ "It's Baaack: Japan's Slump and the Return of the Liquidity Trap", Paul R. Krugman, Kathryn M. Dominquez, Kenneth Rogoff. Brookings Papers on Economic Activity, Vol. 1998, No. 2 (1998), pp. 137-205
^ a b Krugman, Paul (2000), "Thinking About the Liquidity Trap", Journal of the Japanese and International Economies, v.14, no.4, Dec 2000, pp 221-237.
^ "Reply to Nelson and Schwartz", Paul Krugman, Journal of Monetary Economics, v.55, no.4, pp 857-860 05-23-2008
^ Krugman, Paul (1999). "The Return of Depression Economics", p.70-77. W. W. Norton, New York ISBN 039304839X
^ Congdon, Tim (2005). "Money and Asset Prices in Boom and Bust", p.104. The Institute of Economic Affairs, London. ISBN 025536570
^ "Japan's Trap", May 2008. [8] Access date 08-22-2009
^ "Further Notes on Japan's Liquidity Trap", Paul Krugman
^ Restoring Japan's economic growth, Adam Posen, Petersen Institute, 1 September 1998, ISBN 978-0881322620 , p.123,
^ "What is wrong with Japan?", Nihon Keizai Shinbun, 1997 [9]
^ Krugman, Paul. "Stay the Course". www.nytimes.com. http://www.nytimes.com/2009/06/15/opinion/15krugman.html. Retrieved 2009-08-15.
^ "Some Reasons Why a New Crisis Needs a New Paradigm of Economic Thought", Keiichiro Kobayashi, RIETI Report No.108, Research Institute of Economy, Trade & Industry (Japan), 07-31-2009
^ Catherine Rampell (October 13, 2008). "Paul Krugman Wins Economics Nobel - Economix Blog - NYTimes.com". Economix.blogs.nytimes.com. http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?em. Retrieved 2008-10-13.
^ Prize Committee of the Royal Swedish Academy of Sciences, 13 October 2008, Scientific background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008, Trade and Geography – Economies of Scale, Differentiated Products and Transport Costs
^ Justin Lahart (October 14, 2008). "Paul Krugman Is Awarded Nobel in Economics". Wall Street Journal. http://online.wsj.com/article/SB122389602110728309.html. Retrieved 2009-10-06.
^ a b c The Economist, 13 November 2003, Paul Krugman, one-handed economist
^ ""The Great Unraveling: Losing Our Way in the New Century"". Powell's Books. http://www.powells.com/biblio/61-0393326055-0. Retrieved 2007-11-22.
^ a b Krugman, Paul, Rolling Stone. 14 December 2006, "The Great Wealth Transfer"
^ a b Nobelpristagaren i ekonomi 2008: Paul Krugman, speech by Paul Krugman (accessed December 26, 2008) 00:43 "The title of The Conscience of a Liberal [...] is a reference to a book published almost 50 years ago in the United States called The Conscience of a Conservative by Barry Goldwater. That book is often taken to be the origin, the start, of a movement that ended up dominating U.S. politics that reached its first pinnacle under Ronald Reagan and then reached its full control of the U.S. government for most of the last eight years."
^ a b c Michael Tomasky, The New York Review of Books, November 22, 2007, The Partisan
'^ Paul Krugman. The Conscience of a Liberal, 2007, W.W. Norton & Co. ISBN 0393060691 p. 182
^ Conscience of a Liberal, p.102
^ op. cit. p.108
^ Oct 17 2007- Krugman On Healthcare, Tax Cuts, Social Security, the Mortgage Crisis and Alan Greenspan, in response to Alan Greenspan's Sept 24 appearance with Naomi Klein on Democracy Now!
^ Malefactors of Megawealth David M. Kennedy
^ a b J. Peter Neary (2009), "Putting the 'New' into New Trade Theory: Paul Krugman's Nobel Memorial Prize in Economics", Scandinavian Journal of Economics, 111(2), pp217-250
^ a b c Hirsh, Michael (4 March 1996). "A Nobel-Bound Economist Punctures the CW--and Not a Few Big-Name Washington Egos". Newsweek. http://www.newsweek.com/id/101625. Retrieved 2008-10-13.
^ "China the financial nexus" - Krugman
^ a b c d e f g Confessore, Nicholas (December 2002). "Comparative Advantage". Washington Monthly. http://www.washingtonmonthly.com/features/2001/0212.confessore.html. Retrieved 2007-02-05.
^ New Statesman, 16 February 2004, NS Profile - Paul Krugman
^ Okrent, Daniel (2005-05-22). "I Meant to Write About but Never Did". New York Times. http://www.nytimes.com/2005/05/22/weekinreview/22okrent.html. Retrieved 2009-08-16.
^ a b c Evan Thomas, Newsweek, April 6, 2009, "Obama's Nobel Headache"
^ Krugman, Paul (December 1994). "The Myth of Asia's Miracle". Foreign Affairs (www.foreignaffairs.org). http://www.foreignaffairs.org/19941101faessay5151/paul-krugman/the-myth-of-asia-s-miracle.html. Retrieved 2008-12-26.
^ Van Den Berg, Hendrik; Joshua J. Lewer (2006). International Trade and Economic Growth. M.E. Sharpe. pp. 98-105. ISBN 978-0765618030.
^ Krugman, Paul (1998-09-07). "Saving Asia: It's Time To Get Radical The IMF plan not only has failed to revive Asia's troubled economies but has worsened the situation. It's now time for some painful medicine.". Fortune. http://money.cnn.com/magazines/fortune/fortune_archive/1998/09/07/247884/index.htm. Retrieved 2009-07-12.
^ "An Open Letter to Prime Minister Mahathir", Sept 1 1998
^ "Malaysia's Currency Controls: What They Mean and Whether The Will Work", V V Bhanoji Rao, Economic and Political Weekly, 10 Oct 1998.
^ Malaysia's economy: The Sinatra Principle, Andrew Walker, BBC News, 15 November, 1999.
^ a b Landler, Mark (1999-09-04). "Malaysia Wins Its Economic Gamble". New York Times (New York Times). http://www.nytimes.com/library/world/asia/090499malaysia-econ.html. Retrieved 2009-07-15.
^ The Capitalist Manifesto, Fareed Zakaria, Newsweek, 13 June, 2009.
^ "Capital Control Freaks: How Malaysia got away with economic heresy", Slate, Sept. 27, 1999. Access date 08-25-2009
^ Krugman, Paul (2003-03-21). "Who Lost the U.S. Budget?". New York Times (New York Times). http://www.nytimes.com/2003/03/21/opinion/21KRUG.html. Retrieved 2009-06-24.
^ Dana, Will (2003-03-23). "Voodoo Economics". Rolling Stone (rollingstone.com).
^ Lehrke, Dylan Lee (2003-10-09). "Krugman blasts Bush". The Daily of the University of Washington (dailyuw.com). http://dailyuw.com/2003/10/9/krugman-blasts-bush/. Retrieved 2009-08-01.
^ a b Krugman, Paul (2001-10-07). "Fuzzy Math Returns". New York Times (New York Times). http://www.nytimes.com/2001/10/07/opinion/07KRUG.html. Retrieved 2009-08-01.
^ Krugman, Paul (2005-08-29). "Greenspan and the Bubble". New York Times (New York Times). http://www.nytimes.com/2005/08/29/opinion/29krugman.html. Retrieved 2008-12-07.
^ Krugman, Paul (2008-03-24). "Financial Crisis Should Be at Center of Election Debate". Spiegel Online (Spiegel). https://www.spiegel.de/international/0,1518,543074,00.html. Retrieved 2009-07-09.
^ Krugman, Paul (2008-03-24). "Taming the Beast". New York Times (New York Times). http://www.nytimes.com/2008/03/24/opinion/24krugman.html. Retrieved 2009-07-09.
^ Krugman, Paul (2008-03-29). "The Gramm connection". New York Times (New York Times). http://krugman.blogs.nytimes.com/2008/03/29/the-gramm-connection/. Retrieved 2009-06-24.
^ Lerer, Lisa (2008-03-28). "McCain guru linked to subprime crisis". Politico. http://www.politico.com/news/stories/0308/9246.html. Retrieved 2009-06-24.
^ Paul Krugman. Behind the Curve, New York Times, Mar 9, 2009
^ a b c d e f Paul Krugman, "My Connection With Enron, One More Time", Retrieved October 27, 2008.
^ White House Says Economics Adviser Saw Little Risk on Enron
^ "Enron Follies", Rich Karlgaard, Forbes magazine, 02-13-2002.
^ "Andrew Sullivan's selective Enron outrage", Eric Boehlert, Salon, 01-31-2002
^ Howard Kurtz, ... And the Enron Pundits, 01-30-2002.
^ Paul Krugman, The Ascent of E-Man", Fortune magazine, May 1999.
^ Paul Krugman, "Me and Enron". Retrieved March 28, 2007.
^ "California Screaming", op-ed column, New York Times, 12-10-2002.
^ Krugman, Paul (2009-10-16), Samuel Brittan’s recipe for recovery, New York Times, http://krugman.blogs.nytimes.com/2009/10/16/samuel-brittans-recipe-for-recovery/
^ Krugman, Paul. (2009-9-2). "How Did Economists Get It So Wrong?". New York Times. Retrieved 2009-10-09.
^ Krugman, Paul (2009-05-19), Actually existing Minsky, New York Times, http://krugman.blogs.nytimes.com/2009/05/19/actually-existing-minsky/
^ Rezende, Felipe C. (2009-08-18), Keynes's Relevance and Krugman's Economics, http://neweconomicperspectives.blogspot.com/2009/08/keyness-relevance-and-krugmans.html
^ Reckonings; A Rent Affair, by Paul Krugman, The New York Times, June 7, 2000
^ Living Wage: What It Is and Why We Need It book review by Paul Krugman, Washington Monthly, September 1, 1998
^ Ricardo's difficult idea
^ True Blue Americans, by Paul Krugman, The New York Times, May 7, 2002
^ Driving Under the Influence, by Paul Krugman, The New York Times, June 25, 2000
^ A Failed Mission, by Paul Krugman, The New York Times, February 4, 2003
^ Reckonings; Pursuing Happiness, by Paul Krugman, The New York Times, March 29, 2000
^ Reckonings; Blessed Are the Weak, by Paul Krugman, The New York Times, May 3, 2000
^ Dev Gupta, Satya (1997). The political economy of globalization. Springer. pp. 61.
^ Krugman, Paul R. (1987). "Is Free Trade Passe?". The Journal of Economic Perspectives 1 (2): 131–144. http://www.jstor.org/pss/1942985.
^ "Republicans and Race", Paul Krugman, New York Times, 11-19-2007
^ "The Town Hall Mob", Paul Krugman, New York Times, 08-07-2009
^ [The Conscience of a Liberal: Book Review], William Amponsah, Savannah Daily News, 12-03-2007
^ Jay Parini, The Guardian, 22 March 2008, Review: The Conscience of a Liberal
^ "Loury's Exodus: A profile of Glenn Loury", Robert S. Boynton, The New Yorker, 05-01-1995
^ "Glenn Loury's Round Trip: The travails and temptations of a black intellectual", Paul Krugman, Slate, 05-14-1998. At PK MIT site, access date 08-19-2009
^ A critical analysis of the contributions of notable black economists, Kojo A. Quartey, Ashgate Publishing, Sep 2000 ISBN 978-1840141474
^ Mwakikagile, Godfrey (2006). 'Black Conservatives in the United States. New Africa Press. pp. 117. ISBN 978-0980258707.
^ http://www.nytimes.com/2008/10/13/opinion/13krugman.html, 'Gordon Does Good', Retrieved 08 June 2009
^ http://www.nytimes.com/2009/06/08/opinion/08krugman.html 'Gordon the Unlucky', Retrieved 08 June 2009
^ Avinash Dixit, The Journal of Economic Perspectives, Vol. 7, No. 2 (Spring, 1993), pp. 173-188, In Honor of Paul Krugman: Winner of the John Bates Clark Medal, Retrieved March 28, 2007.
^ Mother Jones: Paul Krugman., August 7, 2005. Retrieved March 28, 2007.
^ Paul Krugman, 2004. Retrieved March 28, 2007.
^ "Nobel Prize in Economics". Swedish Academy. http://nobelprize.org/nobel_prizes/economics/laureates/2008/. Retrieved 2008-10-13.
[edit] External links
http://en.wikipedia.org/wiki/Paul_Krugman
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