Paul Robin Krugman (born 1953) is an American economist, columnist, author, and intellectual. He is professor of economics and international affairs at Princeton University, and is also a columnist for The New York Times, writing a twice-weekly op-ed for the newspaper since 2000.
Krugman is well known in academia for his work in trade theory, which provides a model in which firms and countries produce and trade because of economies of scale and for his textbook explanations of currency crises and New Trade Theory. He was a critic of the "New Economy" of the late 1990s. Krugman also criticized the fixed exchange rates and Thailand before the 1997 East Asian financial crisis, and of investors such as Long-Term Capital Management that relied on the fixed rates just before the 1998 Russian financial crisis. Krugman is generally considered a neo-Keynesian, with his views outlined in his books such as Peddling Prosperity. His International Economics: Theory and Policy (currently in its seventh edition) is a standard textbook on international economics without calculus. In 1991 he was awarded the John Bates Clark Medal by the American Economic Association. He is among the 50 top economists in the world according to IDEAS/RePEc.
Krugman is generally considered a political liberal or progressive, and is an ardent critic of the George W. Bush administration and its foreign and domestic policy. Unlike many economic pundits, he is also regarded as an important scholarly contributor by his peers. He has written over 200 scholarly papers and 20 books — some academic, and some written for the layperson.
Krugman (pronounced as Kroog-man) was born and grew up on Long Island, and majored in economics (though his initial interest was in history) as an undergraduate at Yale University. He earned a Ph.D. from MIT in 1977 and taught at Yale, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining the faculty of Princeton University, where he has been since 2000. He is married to Robin Wells, a fellow professor at Princeton, his second marriage; he has no children from either. From 1982 to 1983, he spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers. He is also a member of the international economic body, the Group of Thirty.
When Bill Clinton came into office in 1992, some believe that he considered Krugman for a leading post; Krugman says he was flown out for a meeting in Arkansas. Newsweek reported in 1996 that "Krugman's outspokenness [was] the main reason the Clinton administration didn't offer him a job." Krugman says he would not have been interested in such a job; he told Newsweek, "I'm temperamentally unsuited for that kind of role. You have to be very good at people skills, biting your tongue when people say silly things." Instead he continued to write journalism for wider audiences, first for Fortune and Slate, later for The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly. Krugman said that to answer what he called Pop Internationalism, "I would have to write essays for non-economists that were clear, effective, and entertaining."
In the early 1990s, he helped popularize the argument made by Laurence Lau and Alwyn Young, among others, that the growth of economies in East Asia was not the result of new and original economic models, but rather increased capital and labor inputs, which did not result in an increase in total factor productivity. His prediction was that future economic growth in East Asia would slow as it became more difficult to generate economic growth from increasing inputs.
In the 1990s, Krugman's focus was on what can be described as policy economics, which he attempted to explain to the general audience in such works as Peddling Prosperity and columns attacking what he described as "policy entrepreneurs" who were focused single-mindedly on particular solutions, which they proposed as solving every conceivable crisis. He was critical of industrial policy (an approach Clinton later dropped under the influence of Robert Rubin and Lawrence Summers) and argued in favor of free trade. (He writes on p. xxvi of his book The Great Unraveling that "I still have the angry letter Ralph Nader sent me when I criticized his attacks on globalization.")
Krugman was one of many economists to serve as a consultant for an advisory board for Enron; he did this in 1999, being paid $37,500 and writing Fortune Magazine column referring in part to his experiences at Enron before New York Times rules required him to resign when he took a job as a columnist in 2000. He stated later the consulting was to "[offer] Enron executives briefings on economic and political issues" and that it had required him to "spend four days in Houston."
However, when the story of Enron's corporate scandals broke, critics accused him of having a conflict of interest and the job of having been a bribe to control media coverage, charges he denies forcefully. He points out that in columns written before and after the scandal, he disclosed his past Enron relationship when he wrote about the company. He also was critical of the company: he was one of the first writers to argue that deregulation of the California energy market had led to market-manipulation by energy companies (in a column in the New York Times on December 10, 2000 called "California Screaming"); Enron was the largest in this market; he criticized it directly in August 17, 2001. He writes in The Great Unraveling (p. 26) that
His first column on the epidemic was published in The New York Times on February 1, 2002 with the title, "Two, Three, Many?"
Since January 2000, Krugman has contributed a twice-weekly column to the Op-Ed page of the New York Times, which has made him, in the words of the Washington Monthly, "the most important political columnist in America… he is almost alone in analyzing the most important story in politics in recent years — the seamless melding of corporate, class, and political party interests at which the Bush administration excels." In 2007, he began supplementing his Times column with a blog. In introducing it, he wrote, "Many of the posts will be supplements to my regular columns; I'll be using this space to present the kind of information I can't provide on the printed page — especially charts and tables, which are crucial to the way I think about most of the issues I write about."
In September, 2003, Krugman published a collection of his columns under the title, The Great Unraveling. Taken as a whole, it was a scathing attack on the Bush's administration's economic and foreign policies. His main argument was that the large deficits generated by the Bush administration — generated by decreasing taxes, increasing public spending, and fighting a war in Iraq — were in the long run unsustainable, and would eventually generate a major economic crisis. The book was a best-seller.
In 2007, Krugman published The Conscience of a Liberal. The book is a history of wealth and income gaps in the US in the 20th century. The book documents that the gap between rich and poor declined greatly in mid-century, then widened in the last two decades to levels higher than those in the Gilded Age of the 1920s. Most economists (including Krugman) have regarded the late-20th-century divergence as resulting largely from changes in technology and trade, but Krugman writes that government policies had played a much greater role both in reducing the gap in the 1930s through 1970s and in widening it in the 1980s through the present. He rebuked the Bush administration for policies that currently widen the gap between the rich and poor. Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense. The book was praised in outlets such as the New York Review of Books, but it was attacked by such organizations as the libertarian Von Mises institute, where it was argued to be overly political and virtually without ideologically-sympathetic economic content.