Paul Krugman

Paul Krugman is an American economist, author, and columnist whose research reshaped trade theory and economic geography, and whose writing addresses economic policy.

New trade theory: An approach to international trade explaining how scale economies and imperfect competition generate trade between similar countries. Krugman’s 1979 model helped establish this explanation for trade beyond differences in resources.
2008 Nobel Memorial Prize in Economic Sciences: The economics prize awarded to Paul Krugman for work on trade patterns and economic activity location. The award recognized his analysis of economies of scale and consumers’ preference for variety.
John Maynard Keynes: A British economist whose theories of aggregate demand reshaped macroeconomics and public policy. Krugman often draws on Keynesian arguments when criticizing austerity and advocating demand support.
Austerity: Policies that reduce government deficits through spending cuts, tax increases, or both. Krugman has repeatedly argued that austerity during weak demand can deepen recessions.
Import substitution industrialization: A development strategy that promotes domestic production of goods previously imported. Krugman’s trade frameworks help analyze the costs and limits of protection-based industrial policy.
Monopolistic competition: A market structure in which many firms sell differentiated products and possess some control over prices. This market structure lets his trade models explain variety and trade among similar economies.
Core-periphery model: A model showing how economic activity can concentrate in a central region while peripheral regions lose industry. Krugman’s model made the self-reinforcing formation of industrial centers analytically tractable.
Paul Samuelson: An American economist who unified major strands of modern economic theory and popularized economics through writing. Samuelson’s trade-theory work helped shape the intellectual tradition Krugman extended.
Expansionary fiscal policy: Government spending increases or tax reductions intended to raise aggregate demand and economic activity. It is the main policy alternative Krugman has advocated during severe demand shortfalls.
New economic geography: A research program applying formal models to explain the spatial concentration of economic activity. Krugman’s work founded this approach to regional development and industrial location.

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Larry SummersCompared with: Krugman has sharply challenged Summers’s views on fiscal policy and economic conditions.