I'm a little late to the party--my various ailments have taken longer than expected to recover from. But though the timing may have been political, the prize is well deserved, indeed overdue, as plenty of other commenters have noted. I would offer my congratulations if I thought that the good professor cared to get them.
One of the most interesting things that I've read in multiple commenters is that his most important insights seemed obvious. I think perhaps the deepest economics insights do--after someone has pointed them out. Everything from comparative advantage to the Coase Theorem makes you slap your head with the inescapable logic of it, and wonder how it can have escaped the human race for so long. And still, it takes a genius to reveal these obvious truths to the rest of us poor slobs. Krugman's math is far too impenetrable for this English major, but the conclusions are as clear and lovely as a bell.
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Krugman's math is far to impenetrable for this English major...
Good grief! For the sake of all that is good and decent, please resign as an blogger specializing in economics, forthwith! Thanks in advance.
Feel better.
How about the inescapable logic of non-fiat currency? Or the obvious problems with fractional reserve?
Just kidding - in a world where the country associated with rampant capitalism and the free market moves to socialize the banking industry, and libertarian commentators plead for a bailout so badly they get sick, it's probably best not to dwell on principles.
Everything from comparative advantage to the Coase Theorem makes you slap your head with the inescapable logic of it, and wonder how it can have escaped the human race for so long. And still, it takes a genius to reveal these obvious truths to the rest of us poor slobs.
Yes, this is so true. Coase's work is an amazing example because it's all written in pretty plain English, but there are a number of others, many of which have won the Nobel. They seem obvious when stated plainly but they're not or people wouldn't misunderstand slightly dressed up versions over and over again.
First of all, there is no "Nobel Prize in Economics" contained in the will of Alfred Nobel. The prize awarded was set up by the Swedish central bank and named in honor of Nobel. It's called "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel". To call it a "Nobel Prize" is to sully the name of the honored.
Secondly, while Krugman did good work in the seventies (trade theories otherwise known as mercantilism), which is mainly what won him this prize, he's now a columnist and has become little more than a low-life, two-bit political hack.
To paraphrase Ghostbusters: "...[his] theories are the worst kind of popular tripe, [his] methods are sloppy and [his] conclusions are highly questionable..."
Unfortunate that he should win now because it may lend credence to his socialist arguments many of which are what got us into this mess in the first place.
To paraphrase Ghostbusters: "...[his] theories are the worst kind of popular tripe, [his] methods are sloppy and [his] conclusions are highly questionable..."
Unfortunate that he should win now because it may lend credence to his socialist arguments many of which are what got us into this mess in the first place.
I'm going to go ahead and speculate that you supported the Iraq Invasion (and if you ever did abandon that awful idea, it was only relatively late in the game) and do not consider yourself part of the Reality Based Community. But I'm merely speculating.
Gee Nick, you did everything but call Krugman a terrorist sympathizer for being associated with the originator of dynamite.
Your post sounds less like a well-thought critique of Krugman's work than a long-simmering pot of sour grapes.
"To call it a "Nobel Prize" is to sully the name of the honored."
Then why does the Noble Prize committee call it that?
Nick - "To call it a "Nobel Prize" is to sully the name of the honored." doesn't logically follow from "First of all, there is no "Nobel Prize in Economics" contained in the will of Alfred Nobel. The prize awarded was set up by the Swedish central bank and named in honor of Nobel. It's called "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel".
Yes this prize has a different history, but it isn't less prestigious or important.
I agree with you about him being mostly a political partisan now, maybe even a "hack" (although not a two bit one, I'm sure he gets paid a lot, and also he is more sophisticated than "two bit" would usually imply), but the prize is for and about his research, not his current columns.
If winning a Nobel prize will grant more credence to the prize winners views than I'd like to point out -
-----------
Hundreds of Economists Sign Letter Opposing Obama's Tax Plan
Hundreds of economists (including Nobel Prize winners Gary Becker, James Buchanan, Robert Mundell, Edward Prescott, and Vernon Smith) have signed letters opposing Barack Obama's economic and tax plans (here, here, and here):
We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.
After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008.
http://taxprof.typepad.com/taxprof_blog/2008/10/hundres-of-econ.html
Fascinating points all, Tim. But I just hope that the ultra-rich don't have to pay an additional 1.5%. That's the road to Stalinism if you ask me.
And those are some heady economists you rattle off there.
Ed -
The post you link to claiming that McCain couldn't find 100 economists to sign on is out of date. You can find the current count here:
http://www.economistsformccain.com./
Your entry wasn't a total waste, though, since it gave me the idea of signing. That's one more name on the list that might not have been there if it hadn't been for you!
@Ed -
Sorry pal, I opposed Iraq war I when George the first did it and I opposed the latest misadventure even before it began.
Much to the chagrin of those around me who couldn't understand why I didn't believe the "weapons of mass destruction" lie...
In addition, I also do not support attacking Iran.
So keep right on speculatin'
@Jeremy
I don't need to critique his work.
Have you read his columns?
They speak volumes on their own.
@rick
I haven't the foggiest idea...
I could "speculate" to borrow a word from another poster and say because it brings them publicity.
However, it is my opinion that Nobel wouldn't want his name associated with the award.
Unforunately, we can't wake him up and ask him so you have my opinion that when coupled with five bucks will net you a Big Mac value meal (supersized of course) at your nearest Mickey Dees.
You could ask them why they call it that, but I wouldn't expect an answer.
Nick, what do his columns have to do with him winning the Nobel Prize for Economics? Should he really have been disqualified because he wrote some partisan columns after his contribution to economic theory?
I hear Modigliani had a habit of parking in handicapped spots. Amartya Sen was purported to never wash his hands after using the bathroom. And it's widely circulated that Gerard Debreu cussed like a sailor. Does that mean that none of them should have been honored for their work in economics?
You were an English major undergrad? What was your GMAT score? I'm going to guess it was lower than the mean score of Chicago GSB admits. 650, perhaps, with a 5.5 on the Analytical Writing Assessment?
Megan, thanks for being classy on this occasion.
ed - Its not just 100 economists, its hundreds, including 5 Nobel laureates. And its hardly limited to a collection of economists from right wing thing tanks, in fact most of the signers are not employees of such organizations.
As for "the ultra-rich having to pay another 1.5%", well in addition to that not being such a good idea itself, its also an entirely irrelevant idea, as that isn't what Obama is proposing. In terms of personal income taxes he's talking about increasing taxes on everyone who makes more than $250k, or even $200k. Also he is increasing tax rates on investments, as well as making other more specific or "targeted" tax increases. And many people who won't see their total tax bill increase (assuming Obama sticks to this proposal, and doesn't add additional tax increases) will see their marginal effective tax rates increase significantly, lessening their incentive to earn additional income, even while not hitting them harder at their current income level.
Krugman is famous for using shockingly simple math. Especially those early trade papers. Its elementary school level algebra with a teeny bit of high-school level calculus.
These are not the first order conditions of a dynamic stochastic general equilibrium models log-linearized around the steady-date. Nor are they Generalized Auto-regressive conditional Heteroskedasticity models. There are no bordered Hessian matrices to solve. These are Revenue = Price x Quantity type equations.
A lot of his brilliance was showing how complex problems that plagued trade economists could be analyzed using extremely simple math. In his writings he actually talks about how he was initially sad that he didn't get to show off all the fancy math he learned in graduate school.
Maybe it is because as a theorist he uses greek letters instead of numbers, and that throws you off, but the math is really not hard at all. Its hard to imagine it being any simpler. The above commenter is right, if you find it too impenetrable you probably shouldn't be writing an econ themed blog.
@Jeremy
I'm not saying he should be disqualified - All I'm saying is that a prize for the work he did forty years ago has very little bearing on today and shouldn't add any weight to ideas he has today.
If it makes you feel better, I honestly believe that the prize alone shouldn't add weight to *any* person's ideas - Not just Krugman's.
@ Nick
Secondly, while Krugman did good work in the seventies (trade theories otherwise known as mercantilism), which is mainly what won him this prize, he's now a columnist and has become little more than a low-life, two-bit political hack.
If you read the bios of many Nobelists, they often have moved on from the work for which they won, in some cases out of research almost completely. The 2001 Nobelists (Spence, Stiglitz and Akerlof) are a good example. Michael Spence basically left research not long after he got his dissertation work was published. He went into admin fairly quickly and hasn't done much since. But wow, what an influential book! Akerlof continued as a researcher but he almost totally dropped the topic of limited information in markets for which he was cited after writing "The Market for Lemons."
I'm not saying he should be disqualified - All I'm saying is that a prize for the work he did forty years ago has very little bearing on today and shouldn't add any weight to ideas he has today. If it makes you feel better, I honestly believe that the prize alone shouldn't add weight to *any* person's ideas - Not just Krugman's.
Krugman already said "I don't expect this to lend me any extra cache---just look at Stiglitz."
Krugman's math is far too impenetrable for this English major
This is the English major who represents herself as an authoritative "voice" on economic issues for The Atlantic, a publication whose name was once associated with intellectual excellence.
This is also the English major who did not bother to read Krugman's own description of his economics research, available here:
http://www.princeton.edu/~pkrugman/incidents.html
This link is cited on Krugman's blog, and it clearly summarizes a long span of outstanding contributions to his field.
McArdle never seems to feel the least obligation to do her homework before clattering at her keyboard. We should be grateful that she does not comment on literature.
Nick's ignorance is quite revealing. It's probably not worth engaging, but just for the record..
The work Krugman was cited for wasn't done "forty" years ago. The really big papers were published in 1979 and 1991. That means the first outstanding paper was less than 30 years ago, and the other one less than 20 years ago. These aren't long time lags, given that the Nobel is usually given for an insight that was subsequently assessed and exploited by the scholarly community.
I agree that if Megan can't work through Krugman's math, then she shouldn't really be marketing herself as an economics blogger. It's a bit harder than the math that Nick has failed so badly at, but it really isn't that hard. At least she could make an effort to describe the work for an inexpert audience. Overall this post is a big disappointment.
""To call it a "Nobel Prize" is to sully the name of the honored."
Then why does the Noble Prize committee call it that?"
They don't. The Nobel prize committee simply calls it "the economics prize". They have nothing to do with it and don't particularly like it being presented as something equivalent to the physics, chemistry, etc. prizes. It's economists who blur the distinction in the hope of making the Sveriges Riksbank Prize sound like something more than it is.
Impenetrable is a good word for Krugman's math.
It isn't that hard in retrospect, but the first time around it felt very foreign.
I am speaking from the perspective of someone who had to do oral presentations on Krugman's early stuff in 1986 or so. It wasn't hard or scary - like some other papers - but it was very different from what we'd seen in our texts (this was before there were any New Trade texts).
The analogy I draw is that it was like being a native English speaker on your first trip to the Netherlands: it doesn't take too long for you to realize that you can understand quite a bit of a language that at first seems completely foreign.
All I'm saying is that a prize for the work he did forty years ago
Forty years ago Paul Krugman was 15. Smart kid.
That's the biggest thing you guys can find fault with? That I screwed up the math in my head while aimlessly commenting on a blog post because I didn't really care enough to actually go LOOK at the exact years he published?
Sheesh. Who cares? It doesn't change my point - Giving him the "prize" and calling it a "Nobel Prize" gives credibility to his ideas *today*. Ideas which amount to little more than the typical socialist dribble.
I'd just like to point out that as I predicted, people on another thread are using Krugman's "lottery win" to bludgeon Megan for her criticisms of his "dart throwing" predictions of recession, many of which were based on nothing but his dislike of Republicans in general and George Bush in particular.
The exact claim is "How can you criticize a Nobel Prize winner?"
So I rest my case.
Smart conservatives admit that Krugman's actual economics work was very good.
His activities since then - advisor to ENRON, advisor to the Jew-hatin' Islamist PM of Malaysia and unhinged, BDS-suffering columnist are less cool.
The question, then, is why is he being honored now?
I think the answer is pretty obvious.
Late, but what the hell:
http://www.brianbeutler.com/2008/10/chortling/
Word.
750 with a perfect score on the writing, Fred, and why does this matter?
I'm a bloody psych major and I predicted the same thing and warned my heavily real estate friends that the whole thing was shaky at best several years ago. Whether you call for a recession or a boom eventually you'll be right. The trick is to call it a year before or 2 before it happens and for your easons for it to be right. Krugman has gone from being a econonist to a gadfly partisan columnist.