Krugman, Paul R. 1953–

PERSONAL: Born 1953; son of an insurance company manager; married Robin Wells (an economist). Ethnicity: "White." Education: Attended Yale University; Massachusetts Institute of Technology, Ph.D., 1977.

ADDRESSES: Office—Department of Economics, Princeton University, Princeton, NJ 08540. E-mail—pkrugman@princeton.edu.

CAREER: Yale University, New Haven, CT, former professor of economics; Massachusetts Institute of Technology, Cambridge, former Ford International Professor of Economics; Stanford University, Stanford, CA, professor of economics, beginning 1994; Princeton University, Princeton, NJ, professor of economics and international affairs, 2000–. President's Council of Economic Advisors, senior international economist, 1982–83.

AWARDS, HONORS: John Bates Clark Medal, American Economic Association; Prince of Asturias Prize, 2004.

WRITINGS:

(With Elhanan Helpman) Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy, MIT Press (Cambridge, MA), 1985.

Adjustment in the World Economy, Group of Thirty (New York, NY), 1987.

(With Maurice Obstfeld) International Economics: Theory and Policy, Little, Brown (Boston, MA), 1987.

(With Edward M. Graham) Foreign Direct Investment in the United States, Institute for International Economics (Washington, DC), 1989.

(With George N. Hatsopoulos and James M. Poterba) Overconsumption: The Challenge to U.S. Economic Policy, American Business Conference (Washington, DC), 1989.

Exchange-Rate Instability, MIT Press (Cambridge, MA), 1989.

(With Elhanan Helpman) Trade Policy and Market Structure, MIT Press (Cambridge, MA), 1989.

The Age of Diminished Expectations: U.S. Economic Policy in the 1990s, MIT Press (Cambridge, MA), 1990, revised edition, 1997.

Rethinking International Trade, MIT Press (Cambridge, MA), 1990.

Geography and Trade, Louvain University Press (Louvain, Belgium), 1991.

Has the Adjustment Process Worked?, Institute for International Economics (Washington, DC), 1991.

Currencies and Crises, MIT Press (Cambridge, MA), 1992.

(With Guillermo de la Dehesa) EMU and the Regions, Group of Thirty (New York, NY), 1992.

(Coauthor) Transforming the Philippine Economy, National Economic and Development Authority (Pasig, Metro Manila), 1992.

What Do We Need to Know about the International Monetary System?, International Finance Section, Department of Economics, Princeton University (Princeton, NJ), 1993.

Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations, W.W. Norton (New York, NY), 1994.

Development, Geography, and Economic Theory, MIT Press (Cambridge, MA), 1995.

The Self-Organizing Economy, Blackwell Publishers (Cambridge, MA), 1995.

Pop Internationalism, MIT Press (Cambridge, MA), 1996.

The Accidental Theorist: And Other Dispatches from the Dismal Science, W.W. Norton (New York, NY), 1998.

(With Masahisa Fujita and Anthony J. Venables) The Spatial Economy: Cities, Regions and International Trade, MIT Press (Cambridge, MA), 1999.

The Great Unraveling: Losing Our Way in the New Century, W.W. Norton (New York, NY), 2003.

Contributor to U.S. Foreign Policy and the Third World—Agenda 1985–86, Transaction Books (New Brunswick, NJ), 1985. Author of "No Free Lunch," a monthly column in Fortune; author of "The Dismal Science," an online column for Slate. Contributor to periodicals, including New York Times, Mother Jones, Foreign Affairs, New Statesman, Washington Post, Financial Times, New Republic, and Washington Monthly.

EDITOR

Strategic Trade Policy and the New International Economics, MIT Press (Cambridge, MA), 1986.

Trade with Japan: Has the Door Opened Wider?, University of Chicago Press (Chicago, IL), 1991, reprinted with new preface, 1995.

(With Marcus Miller) Exchange Rate Targets and Currency Bands, Cambridge University Press (Cambridge, England), 1992.

(With Alasdair Smith) Empirical Studies of Strategic Trade Policy, University of Chicago Press (Chicago, IL), 1994.

Currency Crises, University of Chicago Press (Chicago, IL), 2000.

SIDELIGHTS: Paul R. Krugman is the author of many works on international trade, markets, the self-organizing economy, globalization, and the inequality of nations. He helped found the "new trade theory," which describes the consequences of increasing returns and imperfect competition for international trade. In his columns and articles Krugman communicates his economic theories to the non-economist.

Krugman grew up in the New York suburbs, then entered Yale as an economics major with an interest in history. During his junior year he accepted a position as a teaching assistant with economist William Nordhaus of Massachusetts Institute of Technology (MIT). Krugman said he found appealing "the MIT style: small models applied to real problems, blending real-world observation and a little mathematics to cut through to the core of an issue." In 1976, with a group of MIT students, Krugman worked for the central bank of Portugal, assessing policy models and theories in the wake of revolution and an attempted coup.

Krugman began teaching at Yale and soon developed the vision which he said continues to guide his research—the importance of increasing returns and imperfect competition in trade. Although Krugman admits to cynicism of the circuit, he allows that the members "constitute a true, and wonderfully unpretentious, elite." He noted that the settings and formality of conferences ranged considerably; and he often found "more real insight" with "young economists in blue jeans, not famous officials in pinstripes, who really have interesting things to say." In the summer of 1982 Krugman took a leave of absence from MIT to accept the position of chief staffer for international economics of the President's Council of Economic Advisors with the Reagan administration. As a defender of the welfare state, Krugman's views were directly opposed to the majority in the administration. He observed that policy decisions in Washington tend to be based on the advice of advisors who generate a comfort level, rather than that of "those who will force them to think hard. That is, those who really manage to influence policy are usually the best courtiers, not the best analysts." Krugman considers himself a good analyst, but a bad courtier. He wrote much of the 1983 Economic Report of the President.

Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy, which Krugman wrote with Elhanan Helpman of Tel-Aviv University, set forth their "new trade theory," the result of ten months of "total immersion." "This book is worthy reading, not only for international economists analyzing foreign markets, but also for those with a more general background," wrote Donna Hill in Business Economics. "The discussion of the impact of exchange rages on the trade deficit and capital outflows should be of interest to everyone." Krugman called The Age of Diminished Expectations: U.S. Economic Policy in the 1990s, published in 1990, a "stealth textbook on economic theory." The book was reprinted and updated several times. Denise Demong noted in Business Week that the original edition was praised for its readability. Demong called it "Economics 101 made relevant to today's world."

Krugman published many papers on economic geography with the intent of establishing it as a branch of economics. Like the new trade theory, it addresses increasing returns and multiple equilibria. Geography and Trade represents three lectures at the Catholic University of Louvain, Belgium, in October of 1990. "The underlying theme of the book is that a collusion of imperfect market structures and 'geography' creates (and is reinforced by) a cumulative process of regional and international income divergence," wrote Alan MacPherson in Economic Geography. "A related theme, and one that recurs throughout the book, is that regional growth and decline can be traced to a mixture of unique local conditions and historical accidents." MacPherson felt that the book "will disappoint those who would like economists to know more about the state of the art in economic geography. A further problem with the book is that it covers a good deal of ground that has already been well trodden by others…. To be fair, however, Geography and Trade is a worthwhile contribution to the field, if only because a number of simple models and illustrations are presented that clearly depict the role of space in regional and international trade." Choice reviewer J. McDonald observed that, based on the most recent of Krugman's geographic citations in that book, his work takes "little notice of the twenty-five years of solid work that geographers have produced since" 1966. McDonald nonetheless called Krugman's style "literate and engaging" and the book "readable and stimulating."

As an editor, Krugman drew from a 1989 National Bureau of Economic Research conference in Trade with Japan: Has the Door Opened Wider? Paul Shepard wrote in the Journal of Economic Literature that the "ten substantive papers are designed to shed light on the accuracy of … conventional wisdom…. Several of the contributions contain results or arguments that will stimulate further debate…. While this volume leaves some key questions unanswered, it does represent a valuable body of economic analysis of the 'Japan' issue. The three lessons identified by the editor—that Japan is different, that this difference contributes to trade tensions, but that the difference also appears to make sense in the Japanese business context … warrant the serious attention of the professional and policy community."

In Has the Adjustment Process Worked?, Krugman evaluates whether this mechanism worked during the 1980s and the balance-of-payments approach. Currencies and Crises discusses exchange rates, the debt crisis, balance-of-payments, speculation and exchange rates, and the international monetary system. As editor with Marcus Miller, Krugman incorporated ten papers and discussions from a conference organized by the Centre for Economic Policy Research and the National Bureau of Economic Research, held at the University of Warwick in July 1990 for Exchange Rate Targets and Currency Bands.

Industry Week reviewer Daniel J. McConville wrote that in Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations Krugman "declares flat-out that the American 'obsession with competitiveness' is the prime source of our trade deficit. The highly respected new-age trade guru (though little known by the business community) says this obsession drives down the American standard of living and skews the tax structure to make the rich richer and shortchange the poor." McConville wrote that Krugman's solutions are "less emphasis on exports and more on raising productivity. Hike taxes, do away with farm subsidies, reform health care, develop market-driven ways to control pollution, and increase government spending to fight poverty and improve education." "Among professional economists, Paul Krugman's reputation as an innovator is unrivaled," wrote an Economist reviewer. "Although he is still thirty years too young for the Nobel prize he already deserves, the record of this professor at the Massachusetts Institute of Technology is remarkable…. His papers have either developed entirely new ideas or extended old ones in marvelously revealing ways. In each case, his work has formed the basis for research for scores of other economists." The reviewer called Peddling Prosperity "partly an apology for economic science. But, more memorably, it is a furious attack on the hucksters … who bring economic science into disrepute." Leonard Silk wrote in the New Leader that Krugman "has a talent for creating simple mathematical models that enrich and freshen old concepts. And he can write clearly and engagingly for the general reader."

Masahisa Fujita wrote in the Journal of Economic Literature that Development, Geography, and Economic Theory is a "fascinating little book. Professor Krugman presents a series of lively 'meditations' on the nature of modern economic theory. His main focus is on the recent history of two disciplines—development economics and economic geography—both of which have been surprisingly unsuccessful in influencing mainstream economic thought…. The timing of this book could not be better. Given the rapid rise of economic interactions within our increasingly borderless world economy, the need for spatial economic analysis has never been stronger." "This is a book that should be read by all economists, not merely by those with particular interests in development economics and economic geography," wrote Roger E. Backhouse in the Economic Journal.

In reviewing The Self-Organizing Economy in Reason, Steven Postrel called Krugman "an interesting case. His work as an elite economist injected increasing returns to scale into trade theory. That helped beget the deadly mutant spawn 'industrial policy,' which he has since tried to kill with vigorous popular writing. He does not suffer fools gladly, and is happy to puncture the pretensions of pseudo-thinkers like Lester Thurow or William Greider." Postrel called the book "a piece of serious popular science writing; the author tries to be engaging and clear but is not afraid to use a little mathematics…. As a set of lectures aimed at people with backgrounds in economics, it also includes some technical sections that would be hard going for the uninitiated. Fortunately, these can be skipped with little loss of meaning." A.R. Sanderson said in Choice that Krugman extends to economies and economics "the tendency of some complex physical and biological sciences systems to evolve from seeming disorder into order and stability." Sanderson noted the extensive references and felt the book would be "important" for economic scholars in economics as well as for interdisciplinary research.

Pop Internationalism is a collection of Krugman's articles, previously published in publications that include the Harvard Business Review, Foreign Affairs, and Scientific American. A Publishers Weekly reviewer called them "stimulating, maverick essays." "Nobody who writes about economics does it better than Krugman," wrote Steven Pearlstein in the Washington Post Book World. Pearlstein said Pop Internationalism reveals "why competitiveness matters for companies but really not for countries; why genuinely free trade benefits all countries, even trade between rich countries and poor; why globalization isn't really anything new; and why the recent emergence of Asian economies like Singapore and South Korea wasn't really as miraculous as it may have seemed." Michael Hirsh wrote in News-week that Krugman "writes eloquently and simply for the public." Hirsh said Krugman "has debunked the conventional wisdom on nearly every hot-button issue dear to Washington—not to mention the Pat Buchanan parade." Hirsh noted that Krugman feels the trade deficit with Japan is unimportant; that the impact of cheap Third World labor on jobs in the United States is "hugely overstated"; and that Krugman disagrees that an economic war has taken the place of the cold war or that nations are in competition. "You could think of Krugman as a sort of highbrow version of James (The Amazing) Randi, the magician who goes around telling the real story of how rivals bend spoons," said Hirsh. "Krugman doesn't short-sell America's economic problems. He is alarmed at the country's widening income gap…. He was also among the first to warn of the blue-and white-collar backlash against corporate layoffs." Krugman is a proponent of improving and strengthening health care and education for children and would like to see the administration put a fraction of the effort it expends increasing trade with Japan into preventing American kids from falling into poverty.

In The Accidental Theorist: And Other Dispatches from the Dismal Science, Krugman targets former Labor Secretary Robert Reich, French President Jacques Chirac, Newt Gingrich, George Soros, William Greider, and the editors of the Wall Street Journal, who declined printing his article "Supply Side's Silly Season," and which is one of the pieces included in the book. Among the topics discussed are the free market, the relationship between productivity growth and job capacity, economic growth and recession, and taxation and property rights. Library Journal reviewer Norman B. Hutcherson noted that Krugman points out that it is the actions of Alan Greenspan and the Federal Reserve Board, rather than Keynesian economics, "that drive the public's liquidity preference." Hutcherson said Krugman makes economics "comprehensible and exciting," and said he "brings a ray of sunlight to the dismal science of economics."

BIOGRAPHICAL AND CRITICAL SOURCES:

PERIODICALS

America, October 28, 1995, p. 26.

American Economic Review, May, 1992, p. 578.

Barron's, June 27, 1994, p. 30; July 4, 1994, p. 39.

Booklist, February 1, 1994, p. 984.

Business America, November 4, 1991, p. 24.

Business Economics, October, 1989, Donna Hill, review of Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy, pp. 61-62; January, 1991, p. 66; April, 1996, p. 71; October, 1996, p. 71.

Business Library Review, January, 1992, p. 74.

Business Week, May 6, 1991, Denise Demong, review of The Age of Diminished Expectations: U.S. Economic Policy in the 1990s, p. 34; April 18, 1994, p. 20; July 11, 1994; June 26, 1995, p. 18.

Canadian Business, June, 1994, p. 158.

Challenge, September, 1994, p. 62.

Choice, February, 1992, M. McDonald, review of Geography and Trade, p. 937; July, 1994, p. 1766; May, 1996, A.R. Sanderson, review of The Self-Organizing Economy, p. 1525.

Commentary, August, 1996, p. 110.

Commonweal, May 3, 1991, p. 297.

Economic Geography, April, 1992, Alan MacPherson, review of Geography and Trade, pp. 216-218.

Economic Journal, September, 1995, Roger E. Backhouse, review of Development, Geography, and Economic Theory, p. 1355; November, 1996, p. 1832; January, 1997, p. 268.

Economist, October 12, 1991, p. 69; April 30, 1994, review of Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations, p. 17, p. 99; December 9, 1995, p. 33; June 15, 1996, p. S9; March 1, 1997, p. 23.

Electronic News, August 1, 1994, p. 24.

Foreign Affairs, summer, 1990, p. 174; summer, 1992, p. 173.

Fortune, September 16, 1985, p. 33; December 31, 1990, p. 113; June 26, 1995, p. 39.

Industry Week, November 21, 1994, Daniel J. McConville, review of Peddling Prosperity, pp. 41-45.

Journal of Economic Literature, June, 1992, p. 1029; September, 1992, Paul Shepard, review of Trade with Japan: Has the Door Opened Wider?, pp. 1515-1517; December, 1992, p. 1586; March, 1993, p. 312; December, 1994, pp. 1891-1893; December, 1995, Masahisa Fujita, review of Development, Geography, and Economic Theory, p. 1987; June, 1996, p. 937; September, 1996, p. 1429; December, 1996, pp. 2003-2004; June, 1997, p. 787.

Kirkus Reviews, February 1, 1994, p. 118; January 15, 1996, p. 116.

Library Journal, September 1, 1990, p. 232; February 15, 1994, p. 170; June 15, 1998, Norman B. Hutcherson, review of The Accidental Theorist: And Other Dispatches from the Dismal Science, p. 89.

Maclean's, April 4, 1994, p. 44.

Meanjin, March, 1996, p. 96.

Monthly Labor Review, March, 1989, p. 46.

Monthly Review, October, 1992, p. 18.

New Leader, May 9, 1994, Leonard Silk, review of Peddling Prosperity, p. 16.

Newsweek, April 4, 1994, p. 46; March 4, 1996, Michael Hirsh, review of Pop Internationalism, pp. 40-41.

New York Review of Books, October 20, 1994, p. 14.

New York Times Book Review, March 13, 1994, p. 24; May 22, 1994, p. 48; June 5, 1994, p. 26; December 4, 1994, p. 68; March 24, 1996, p. 11.

Publishers Weekly, January 24, 1994, p. 53; February 14, 1994, p. 76; January 29, 1996, review of Pop Internationalism, p. 93; March 3, 1997, p. 72.

Reason, May, 1991, p. 64; May, 1997, Steven Postrel, review of The Self-Organizing Economy, pp. 58-60.

Technology Review, April, 1995, p. 75.

Times Literary Supplement, September 13, 1996, p. 28.

U.S. News and World Report, April 9, 1990, p. 30.

Wall Street Journal, May 26, 1994, p. A12; May 1, 1996, p. A16.

Washington Monthly, September, 1996, p. 58.

Washington Post Book World, March 17, 1996, Steven Pearlstein, review of Pop Internationalism, p. 5.

ONLINE

New Paul Krugman Web site, http://www.wws.princeton.edu/pkrugman (January 22, 2006).