Paul Krugman
Paul Robin Krugman (/ˈkrʊɡmən/ ⓘ KRUUG-mən;[4][5] born February 28, 1953)[6] is an American economist who is the Distinguished Professor of Economics at the Graduate Center of the City University of New York and a columnist for The New York Times.[7] In 2008, Krugman was the sole winner of the Nobel Memorial Prize in Economic Sciences for his contributions to new trade theory and new economic geography.[8] The Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic activity, by examining the effects of economies of scale and of consumer preferences for diverse goods and services.[9]
"Krugman" redirects here. For the surname, see Krugman (surname).
Paul Krugman
Krugman was previously a professor of economics at MIT, and, later, at Princeton University. He retired from Princeton in June 2015, and holds the title of professor emeritus there. He also holds the title of Centennial Professor at the London School of Economics.[10] Krugman was President of the Eastern Economic Association in 2010,[11] and is among the most influential economists in the world.[12] He is known in academia for his work on international economics (including trade theory and international finance),[13][14] economic geography, liquidity traps, and currency crises.
Krugman is the author or editor of 27 books, including scholarly works, textbooks, and books for a more general audience, and has published over 200 scholarly articles in professional journals and edited volumes.[15] He has also written several hundred columns on economic and political issues for The New York Times, Fortune and Slate. A 2011 survey of economics professors named him their favorite living economist under the age of 60.[16] According to the Open Syllabus Project, Krugman is the second most frequently cited author on college syllabi for economics courses.[17] As a commentator, Krugman has written on a wide range of economic issues including income distribution, taxation, macroeconomics, and international economics. Krugman considers himself a modern liberal, referring to his books, his blog on The New York Times, and his 2007 book The Conscience of a Liberal.[18] His popular commentary has attracted widespread praise and criticism.[19]
Economic views[edit]
Keynesian economics[edit]
Krugman identifies as a Keynesian[174][175] and a saltwater economist,[176] and he has criticized the freshwater school on macroeconomics.[177][178] Although he has used New Keynesian theory in his work, he has also criticized it for lacking predictive power and for hewing to ideas like the efficient-market hypothesis and rational expectations.[178] Since the 1990s, he has promoted the practical use of the IS-LM model of the neoclassical synthesis, pointing out its relative simplicity compared to New Keynesian models, and its continued currency in economic policy analysis.[179][180][181]
In the wake of the 2007–2009 financial crisis he has remarked that he is "gravitating towards a Keynes-Fisher-Minsky view of macroeconomics".[182] Post-Keynesian observers cite commonalities between Krugman's views and those of the Post-Keynesian school,[183][184][185] although Krugman has been critical of some Post-Keynesian economists such as John Kenneth Galbraith – whose works The New Industrial State (1967) and Economics in Perspective (1987) Krugman has referred to as not "real economic theory" and "remarkably ill-informed" respectively.[186] In recent academic work, he has collaborated with Gauti Eggertsson on a New Keynesian model of debt-overhang and debt-driven slumps, inspired by the writings of Irving Fisher, Hyman Minsky, and Richard Koo. Their work argues that during a debt-driven slump, the "paradox of toil", together with the paradox of flexibility, can exacerbate a liquidity trap, reducing demand and employment.[187]
Free trade[edit]
Krugman's support for free trade in the 1980s–1990s provoked some ire from the anti-globalization movement.[188][189][190] In 1987 he quipped that, "If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'."[191][192] However, Krugman argues in the same article that, given the findings of New Trade Theory, "[free trade] has shifted from optimum to reasonable rule of thumb ... it can never again be asserted as the policy that economic theory tells us is always right." In the article, Krugman comes out in favor of free trade given the enormous political costs of actively engaging in strategic trade policy and because there is no clear method for a government to discover which industries will ultimately yield positive returns. He also notes that increasing returns and strategic trade theory do not disprove the underlying truth of comparative advantage.
In the midst of the 2009 Great Recession, Krugman made a significant departure from his general support for free trade, entertaining the idea of a 25% tariff on Chinese imports as a retaliation for China's policy of maintaining a low value for the renminbi, which many saw as hostile currency manipulation, artificially making their exports more competitive.[193]
In 2015, Krugman noted his ambivalence about the proposed Trans-Pacific Partnership, as the agreement was not mainly about trade and, "whatever you may say about the benefits of free trade, most of those benefits have already been realized" [by existing agreements].[194]
After the 2016 elections, and Trump's moves towards protectionism, he wrote that while protectionism can make economies less efficient and reduce long-term growth, it would not directly cause recessions. He noted that if there is a trade war, imports would decrease as much as exports, so employment should not be strongly impacted, at least in the medium to long run.[195] He believes that the US should not repeat Reagan's 1981 policy on taxes and quotas on imported products,[196] as even if it does not produce a recession, protectionism would shock "value chains" and disrupt jobs and communities in the same way as free trade in the past. In addition, other countries would take retaliatory measures against US exports.[197] Krugman recommended against the abandonment of NAFTA, because it could cause economic losses and disruptions to businesses, jobs, and communities.[198]
In the late 2010s, Krugman admitted that the models that scholars used to measure the impact of globalization in the 1990s underestimated the effect on jobs and inequality in developed countries such as the US.[199][200] He noted that although free trade has harmed some industries, communities, and some workers, it remains a win-win system overall, enriching both parties to the agreement at the national level; a trade war is equivalently negative for the nations involved, even while it may benefit some individuals or industries within each nation.[201]
Immigration[edit]
Krugman wrote in March 2006: "Immigration reduces the wages of domestic workers who compete with immigrants. That's just supply and demand: we're talking about large increases in the number of low-skill workers relative to other inputs into production, so it's inevitable that this means a fall in wages ... the fiscal burden of low-wage immigrants is also pretty clear."[202]
Green economy[edit]
Krugman has called for a transition to a green economy.[203][204] He supported the Green New Deal,[205] asserting "I believe progressives should enthusiastically embrace the G.N.D.".[206] He said that a "Green New Deal stuff is investment. On that stuff, don't worry about paying for it. Debt as an issue is vastly overstated, and a lot of these things pay for themselves. Go ahead and just deficit finance it."[207] In 2021, he wrote that "we will almost surely have to put a price" on greenhouse gas emissions.[208] He criticized Democratic "moderates" and corporations "torpedoing efforts to avoid a civilization-threatening crisis because you want to hold down your tax bill".[209]
Views on technology[edit]
In 1998 during the dot-com bubble, Krugman wrote a commentary for Red Herring that urged skepticism of optimistic predictions for technology-driven progress. He followed it with several pessimistic predictions of his own, including that "[b]y 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's"[236][237] and that the number of jobs for IT specialists would decelerate and turn down.[236] In a 2013 interview, Krugman stated that the predictions were meant to be "fun and provocative, not to engage in careful forecasting".[238]
Krugman is a vocal critic of Bitcoin,[238] arguing against its economic soundness since 2011.[239][240] In 2017, he predicted that Bitcoin is a more obvious bubble than housing and stated that "[t]here's been no demonstration yet that it actually is helpful in conducting economic transactions".[241]
In December 2022 Krugman predicted that, because of generative AI such as ChatGPT, "quite a few knowledge jobs may be eminently replaceable". He suggested that such technology would likely prove beneficial "in the long run", but that "in the long run, we are all dead, and even before that, some of us may find ourselves either unemployed or earning far less than we expected".[242]
Personal life[edit]
Krugman has been married twice. His first wife, Robin L. Bergman, is a designer.[243][244] He is currently married to Robin Wells, an academic economist who received her BA from the University of Chicago and her PhD from the University of California, Berkeley.[245] She, as did Krugman, taught at MIT. Together, Krugman and his wife have collaborated on several economics textbooks. Although rumors began to circulate in early 2007 that Krugman's "son" was working for Hillary Clinton's campaign, Krugman reiterated in his New York Times op-ed column that he and his wife are childless.[246][247][3]
Krugman currently lives in New York City.[248] Upon retiring from Princeton after fifteen years of teaching in June 2015, he addressed the issue in his column, stating that while he retains the utmost praise and respect for Princeton, he wishes to reside in New York City and hopes to focus more on public policy issues.[249] He subsequently became a professor at the Graduate Center of the City University of New York and a distinguished scholar at the Graduate Center's Luxembourg Income Study Center.[249][250]
Krugman reports that he is a distant relative of conservative journalist David Frum.[251] He has described himself as a "Loner. Ordinarily shy. Shy with individuals."[252]