Listen to this broadcast: Audio
RENEE MONTAGNE, host: The Nobel Prize for economics has long been dominated by Americans and today, another American joins the list of laureates. Princeton University economist Paul Krugman is the winner of this year's Nobel Prize. Krugman is known outside academia for his opinion columns in the New York Times but the Swedish panel awarded Krugman the 2008 Nobel Prize for his theories about globalization. Reporter Curt Nickisch is following the story and joins us now. And you know, I have to tell you, I am a little surprised. I mean, I am used to thinking of Paul Krugman as a newspaper columnist not so much a theorist.
CURT NICKISCH: It's so funny, I was just watching him yesterday as a guest on one of the Sunday TV news shows and of course, people do know him for his columns in the New York Times. But he is a very widely respected economist. He has taught at Yale, Stanford and the London School of Economics, and since 2000, he's been at Princeton which sets him apart from a lot of other pundits is that, he's actually very well respected for his work in punditry and also very well respected for his university research. And that's what the Nobel folks actually gave Krugman. The award for was his research from a few decades ago on international trade in globalization.
MONTAGNE: Tell us a bit more about the theory for which he won.
NICKISCH: Well, Krugman basically helped to explain something that traditional trade theory does not, which is, it would basically predict that countries would get really good at something and specialized it and have superior products. But then you have this paradox, why do people in Sweden, you know that Nobel country, why do people there buy fine cars made in that country but also import so many cars and actually pay extra to ship them there. Well, Krugman sort of built an existing theory and helped explain, you know, how large firms get very strong but not necessarily countries. And he also showed how customers like diversity and that sort of explains this paradox that traditional theory did not explain.
MONTAGNE: Well, though in a way, isn't that obvious, let's say Americans would want to buy imported cars even though America produces cars.
NICKISCH: Yeah, it's obvious now it wasn't a few decades ago when he did the research and it was something that people observed but really couldn't explain with the theory and so he actually did it a good job of in academic terms explaining this. The other thing that the Nobel folks noted was his work on economic geography, why do industrialized countries and developing nations alike see the same trend, which is people moving to cities and developing a high technology class. That was something that everyone observed but didn't really understand and of course, once you explain that, it's really important for, you know, understanding globalization and its effect is really important for businesses that do international trade and policymakers alike, and Krugman's work has been really influential there.
MONTAGNE: You know, one thing about Paul Krugman, he has lacerated the Bush administration's economic policies in his column in the New York Times from day one. How much has that criticism played into this Nobel choice and also its timing?
NICKISCH: That's a great question. He of course, is very famous for his criticisms basically, you know, when it comes to the economy just pointing that the economic policies are sort of unsustainable in the long run - decreasing taxes, increasing spending, the war in Iraq. So, while the Nobel committee gave him this award for his research from a few decades ago, I think a lot of people are going to see it as a little bit of an indictment of the current administration and of course, it comes at a time when the U.S. economy is - or it's primacy is really sort of being questioned abit.
MONTAGNE: Thanks very much.
NICKISCH: My pleasure.
MONTAGNE: Reporter Curt Nickisch on news today that the Nobel Prize for economics has been awarded to economist and New York Times columnist, Paul Krugman.
MONTAGNE: It's NPR News. This Morning Edition from NPR News. And I am Renee Montagne.
Originally broadcast, 10.13.08