Who Is Paul Krugman?:
Paul Krugman is a controversial and influential economics columnist for The New York Times. He is also a professor of Economics and International Affairs at Princeton University. He won the Nobel Memorial Prize in Economic Sciences in 2008 for his formulating "New Trade Theory." He is the author or editor of 20 books, including Principles of Economics, The Return of Depression Economics and the Crisis of 2008 and The Conscience of a Liberal.
Why Is Paul Krugman Important to the U.S. Economy?:
New Trade Theory explains why countries (like Sweden) with a large domestic market for a product, (like a Volvo) develop a comparative advantage
in that product. This helps them become a leading exporter of that product to similar countries (like the U.S.). This led to a second theory that says the areas that have large domestic markets and exports will be more profitable and attract even more production. This is why production is concentrated in just a few, large countries. The cities within those countries become densely populated, attracting workers and consumers, thus making those countries even more successful.
Paul Krugman's blog, The Conscience of a Liberal
, is one of the most-quoted and widely-referred-to blogs in the econoblogosphere. For example, in 2008 he predicted that highly leveraged banks with a lot of international investments would spread their collapse across borders very rapidly. Until then, everyone thought the crisis would be contained to the U.S. or England. Within days of announcing his theory in his blog, it was discussed by most econoblogs.
Like most economists, Krugman is not always right. In early 2010, he predicted there was a 40% chance the economy was headed for a double-dip recession by the second half of the year. He based this prediction on the tightening monetary and fiscal policy. He thought that the Fed's exit plan combined with the end of stimulus spending would take the training wheels off of the shaky economic recovery. Fortunately, he wasn't right on this one. In fact, the economy grew 2.5% in the third quarter, and 2.3% in the fourth quarter. (See GDP Current Statistics)
Krugman's popularity is a result of his direct and accessible writing and speaking style, as well as his credentials and innovative thinking.
Krugman's Early Career:
Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.