Tuesday, October 14, 2008

Paul Krugman Earns The Nobel In Economics

Perhaps better known for his New York Times Columns rather than his contributions to economics, Paul Krugman has earned the Nobel Prize in economics.

For his analysis of trade patterns and location of economic activity. Location and spacial economics has been shelved for some time, getting renown in the 1950's but falling out of favor since then. Since this is my token profession, it is reassuring to see some life being breathed back into the subject.

Especially now that tools to analyze and use locational economics are coming into vogue, such as GIS and aerial photography.

What I respect most about Krugman is that he has taken his field far from academics and brought it into the mainstream, essentially making himself a target from non-academics.

Likewise, he received heavy criticism despite his earning the Nobel Prize for work he did 30 years ago and not his recent contributions to the New York Times.

Here is a synopsis of how Krugman characterizes his work, broken into 4 categories.

1. Listen to the Gentiles - Do not be afraid to talk to member of other professions or backgrounds to get an idea of the bigger picture..

2. Question the question - Question initial assumptions and even if what you are trying to solve is worth solving.

3. Dare to be silly - (my personal favorite) A lot of economics is about a silly procedure to solve a serious problem. Krugman likes to turn things on their heads by using serious procedures to solve a silly problem. In my analysis of Rock-Paper-Scissors I did the same thing, put rigorous experimentation and modeling techniques on a somewhat trivial subject.

4. Simplify, simplify - (This one I have a hard time doing) Krugman is the master of an elegant simple model using theory rather than a "robust" complex model using econometrics. He is able to be very poignant and getting to the heart of the matter, whereas I get pleasure in making simple things brain-stumpingly complex (like rock-paper-scissors).

So to all of Krugmans critics who criticize him for his criticisms of the Bush administration's war against science, reason and criticism, revenge is a dish best served on top of a Nobel Prize.

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