What does Paul Krugman have in common with Eric Maskin, Daniel Kahneman, John Nash, Sir W. Arthur Lewis, A Michael Spence, and Gary Becker? As of this Monday, they are all Princeton University faculty who have one won the Nobel Prize in Economics.
Paul Krugman, Professor of Economics and International Affairs at Princeton University’s Woodrow Wilson School, was already very well known for his twice-weekly op-ed column in the New York Times since 2000, as a regular fixture on Cable news broadcasts, and for his 2007 bestseller, The Conscience of a Liberal, a sharp political, economic, and social study of the past 80 years in America. There, he contends that the dominance of movement conservatism has resulted again in the ascendancy of the wealthy, with initiatives to cut taxes for the rich, to dismantle social programs, and to demolish unions.
The Nobel Prize recognized his insights into international trade and the location of economic activity. He has published more than 200 scholarly papers and 20 books. His criticism of fixed exchange rates in southeast Asia forecast their 1997 financial crisis. More recently, he warned against calls to privatize portions of Social Security and he accurately predicted the collapse of the housing bubble. Krugman earned his PhD from MIT in 1977. Before joining the faculty at Princeton, he taught at Yale, MIT, Berkeley, the London School of Economics, and Stanford.
His fervent following never misses his Monday and Friday NY Times columns, and pines when he leaves on vacation. Technology figures into Krugman’s work in at least two notable ways. The first, a welcome surprise for some readers of the newspaper, is that Krugman maintains a daily blog. In true blog style, it’s possible for adherents to comment about each entry. It’s not uncommon for each entry to receive dozens of thoughtful responses, some of which may help to inspire Krugman. The blog entry on October 9, for example, seeks to respond to the frequently asked question: What should we do about the current financial crisis?
Information technology also figures in as a topic. There are entries about American losing the wireless race, lagging in broadband adoption, and about our falling behind in the next wave of innovation.
And in the recent book, there’s a fascinating discussion about income inequality and technology. In the standard explanation for rising inequality, he reminds us, technological change drives the demand for skilled labor. Vast improvements in information technology, for example, from personal computer and cell phones through networking and supercomputing, all increase the demand for a formally trained work force and reduce the demand for unskilled labor. Word processors and networks obviate the need for typists and filing cabinets.
Krugman emphasizes that there’s actually little direct evidence for the proposition that technological change, by raising the demand for skill, has caused rising inequality. “The truth is that there’s no easy way to measure the effect of technology on markets on this issue, economists mainly invoke technology to explain things that they can’t explain by other measurable forces.” [Conscience of a Liberal, p. 133.]
His blog entry yesterday was perhaps his most special. Just a terse comment, “A funny thing happened to me this morning…”