The crisis prize in times of crisis

Paul R. Krugman has been awarded the Nobel Prize for Economics for his work on trade patterns. The Royal Swedish Academy of Sciences acknowledged his work in coming up with a new trade theory.

Krugman is a professor at Princeton University and was a former adviser to U.S. president Ronald Reagan.

He has been a harsh critic of President George W. Bush for everything from his economic policies to Iraq and has been especially strident about the current U.S. and world financial crises.

A Nobel prize being awarded to a global trade specialist during a world economic crisis is timely.

He supports subsidies for key industries as a way to gain competitive advantage.

Krugman described the recent meeting of the G7 financial ministers in Washington as a failure of leadership and that their final statement was “written in code” which might lead to further panic among investors.

“I think the financial ministers just failed a test, or at best got a C minus,” he was reported as saying.
 
Professor Krugman’s award, worth $US 1.4 million, is the last of six Nobel prizes announced this year. In 1968, the prize in economic sciences became the only one to be added to the original list established in 1895.