Monday, October 13, 2008

Economics Nobel Memorial Prize: Paul Krugman

Paul Krugman won the
Nobel Memorial Prize in Economic Sciences
"for his analysis of trade patterns and location of economic activity".

Well, I have no idea what are the important insights that Krugman is supposed to have discovered - I guess the work is going to be a pseudoscientific defense of protectionism - and I don't exactly count Krugman among the brightest and rational people on the planet but I realize that his work has been cited by many others, he is a well-known person, and I find his name to be a natural extrapolation of the recent trends. Unlike Gore and peace, Krugman at least clearly has something to do with economics, regardless of his being the same leftist as Gore.

So in my counting, the economics prize remains somewhere in between the three serious science prizes and the two prizes - peace and literature - that have become jokes attributed predominantly to clowns for political reasons and that I no longer care about.

Because Krugman is known to be a TRF reader - although far from being the first laureate in this category - let me say: congratulations. You may hear the same word from Arnold Kling, an American libertarian economist, even though his description of Krugman's "pioneering" achievements seems somewhat confusing not only for the Europeans as you can read over there.
As Rae Ann has jokingly pointed out, Krugman's award was good news for the stock market. Dow Jones jumped 936.42 points i.e. 11.08%, by far the biggest daily change ever - in the absolute sense (the previous absolute record jump was only 499 points from 2000, the end of the dotcom bubble; however, in 1987, a drop was over 22% while a jump above 11% occurred in 1969).

NASDAQ and S&P 500 jumped 11.81% and 11.58%, respectively. Not bad but 5 more days like that are needed for the stockholders to recover the recent 3-month losses. ;-)
Incidentally, Václav Klaus introduced the Polish translation of The Blue Planet in Green Shackles. Temperature graphs drawn by the Czech president are included.

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