Nobel Prize Winner on Bubbles, Starships and Mushy Peas
This week Princeton University economist Paul Krugman was announced as winner of this year’s Alfred Nobel memorial prize in Economics (PDF link, YouTube video). He is well known for his work on currency markets, including his advance prediction of the housing bubble and current financial crisis (YouTube link). However, this prize recognises earlier work in which he advanced our understanding of international trade.
Photo by noodlepie on Flickr
We find out via Marginal Revolution that, amongst other things, Krugman has used economic arguments to explain why British food used to be so bad.
An early paper by Krugman applies serious economic analysis to the admittedly silly topic of interstellar trade. Trade between star-systems poses special problems; for one thing, because of the huge travel times even for near-light speed freight vessels. Because of Einsteinian relativity, humans or aliens would experience time differently on the journey to those financial backers who remain on the home planet, so it’s not obvious how interest should be calculated. Those working on these problems, admits Krugman, are a small band, “but the Force is with us.”
December 2nd, 2008 at 11:22 am
[…] Talking of predictors of the economic tsunami, the news that Paul Krugman won the Nobel prize for Economics was an opportunity to reprise his warnings about the state of the economy although others have pointed out his important work in the areas of Bubbles, Starships and Mushy Peas. […]