Two good stories on Krugman — one from yesterday and one from 1991.
The Chronicle of Higher Education has a nice article featuring commentary from Don Davis that exemplifies how most trade economists feel about the award:
That political chatter has some of Mr. Krugman’s colleagues worried that the value of his technical work in economics will be obscured.
“This news should surprise no one,” said Donald R. Davis, a professor of economics and international affairs at Columbia University, in an interview on Monday. “People have known for decades that Krugman might well receive the prize. I think there’s really a sense of delight within the profession today.”…
“It’s not that people were entirely unaware that increasing returns to scale could be a cause of trade,” Mr. Davis said. “But Krugman really provided such an elegant model that was able to encapsulate this idea. You could almost say that in the early work on increasing returns, we were working with hieroglyphs. They could communicate information, but they were very inelegant to work with. Krugman gave us an alphabet that you could then use to create great works of literature. Thousands upon thousands of papers have been written based on these models.”
A Critic of the Left and Right
An oft-noted irony of Mr. Krugman’s career is that even though he has emerged as a scourge of the Bush administration, his early popular writing on economics was largely devoted to criticizing his fellow liberals. In books such as Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations (W.W. Norton, 1994), Mr. Krugman railed against what he described as sloppy protectionist thinking on the left. (In a widely debated 1996 essay in The American Prospect, the left-liberal economist Robert Kuttner wrote, “The career of Paul Krugman epitomizes, if in extreme form, how the conventions of the economics profession work to block a resurgence of liberal activism.”)
But Mr. Davis said that Mr. Krugman’s outlook had not fundamentally changed. “He’s been very consistent throughout his career,” he said. “He says that markets have a role but that markets aren’t perfect. And when markets fail, government has a role. I think he’s been trying to head off mistaken ideas from both directions.”
The other piece of note is Avinash Dixit’s praise for Krugman upon his winning the J.B. Clark Medal. The full profile is worth reading, but here is a great description of Krugman’s style:
Here is Paul’s typical modus operandi. He spots an important economic issue coming down the pike months or years before anyone else. Then he constructs a little model of it, which offers some new and unexpected insight. Soon the issue reaches general attention, and Krugman’s model is waiting for other economists to catch up. Their reaction is generally a mixture of admiration and irritation. The model is wonderfully clear and simple. But it leaves out so much, and relies on so many special assumptions including specific functional forms, that they don’t think it could possibly do justice to the complexity of the issue. Armies of well-trained economists go to work on it, and extend and generalize it to the point where it would get some respect from rigorous theorists. In this process they do contribute some new ideas and find some new results. But, as a rule, they find something else. Krugman’s special structure was so well chosen that most of its essential insights survive all the extension and generalization. His special assumptions go to the heart of the problem, like a narrow and sharp stiletto. By contrast the followers’ work often resembles thoracic surgery, involving much clumsy breaking of ribs; sometimes it proves to be no more than an autopsy of the issue…
Our expectations about the US economy and the US government’s future economic policies may have been diminished as a result of our observation of recent economic performance and policies. But our expectations about Paul Krugman’s future economic research and writing have been greatly raised by our observation of his record so far. I am sure the Clark Medal is but one milestone of many to come in his career.
Krugman is notoriously parsimonious. Here’s an example from The Spatial Economy: