Economist & Nobel Laureate Paul Krugman - Term Paper Example

In addition, that economics is ever changing, not stagnant. He has applied increasing returns theory to international trade and geographic clustering (Krugman and Helpman p.84).   Professional Profile He is acknowledged worldwide as a leader in the fields of economic geography and the role of increasing returns in shaping international trade. At MIT, he became the Ford International Professor of Economics. He has been a professor of Economics and International Affairs in Woodrow Wilson School, Princeton University, and currently with Princeton (New York Times).

He is a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, and a member of the Group of Thirty. He has also worked as an advisor to the Federal Reserve Bank of New York, the World Bank, the International Monetary Fund, the United Nations, and to a number of countries such as Portugal and Philippines (Speakers of Substance ). Recently, he was President of the Eastern Economic Association and a centenary professor at the London School of Economics.

Krugman is also the author and editor of about 18 books and over 200 professional journal articles, mostly on international trade and finance. . 08 he won Nobel Memorial Prize in Economic Sciences for amplification on models of international trade and the geographical concentration of wealth, by probing the effects of economies of scale and of consumer preferences for varied goods and services. Furthermore, in recognition of his work, he received the John Bates Clark Medal from the American Economic Association, an award given every two years to the top economist under the age of 40.

Paul Krugman was awarded the 2011 Gerald Loeb Award for Commentary for his "Paul Krugman Columns" in the New York Times (New York Times). Amongst other Krugman’s credentials include, in 2011 he was among the top 50 influential individuals in global finance and Foreign Policy’s Top 100 Global Thinkers 2010 and 2009. In 1992, he was a member to a team of economist on international appointed by President Reagan to deal with the recession New Trade Theory His professional repute is largely owed to his work in international trade and finance; he is the initiator of the "new trade theory," a major rethinking of the theory of international trade (Krugman p.286, 1994).

New Trade Theory by Paul Krugman brings the determinants of comparative advantage into the model. This theory seeks to explain trade between comparable countries was projected in a 1979 paper in the Journal of International Economics. It is based on two assumptions economies of scale and consumer’s preference for diversity of products. New Trade theory took into consideration the transportation costs, which was the source of the home market effect (Krugman 109-116, 1997). This implies that due to economies of scale countries specialize in production of specific products.

Moreover, despite a country having no comparative advantage in trade it may be in a