Paul Krugman Won 2008 Nobel Prize for Formulation of ‘New Trade Theory’

Paul Krugman was awarded the 2008 Nobel Memorial Prize in Economic Sciences for his formulation of a new theory of trade that the prize committee of the Royal Swedish Academy of Sciences said "deepen[s] our understanding of the determinants of trade and the location of economic activity…. He has thereby integrated the previously disparate research fields of international trade and economic geography.”

Krugman’s theory clarified why worldwide trade is dominated by countries that not only have similar conditions but also trade in similar products, the Academy said, a trade structure that enables specialization and large-scale production that result in lower prices and a greater diversity of commodities.

At the time of the award, Krugman was a professor of economics and international affairs at Princeton University and an NBER research associate affiliated with the programs on International Trade and Investment and International Finance and Macroeconomics.

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