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Nobel Prize
1. The Sveriges Riksbank Prize
in Economic Sciences in
Memory of Alfred Nobel 2008
Ashlyn Burr
Economics
Ms. Goodman
2. Born February 28,
1953 .
American economist,
Professor of
Economics and
International Affairs
at the Woodrow
Wilson School of
Public and
International
Affairs at Princeton
University. He is also
a Centenary Professor
at the London School
of Economics, and
an op-ed columnist
for The New York
Times.
Paul Krugman
3. Economic geography is the study of the
location, distribution and spatial
organization of economic activities across
the world.
New trade theory (NTT) is a collection of
economic models in international trade
which focuses on the role of increasing
returns to scale and network effects.
Background
4. Trade theories, before Krugman, emphasized
comparative advantage of countries of
different characteristics. However towards
the early 20th century, countries with similar
characteristics begin trading. There for
comparative advantage was hard to uphold.
Krugman introduced the idea of countries
producing different brands for different
products. He believed consumers favored
diversity in every product and that
production favors economies of scale. This
was known as the New Trade Theory.
New Trade Theory (NTT)
5. Following the NTT, Krugman explains that
countries who are successful, from the
NTT, will become densely populated and
also have higher levels of income.
Production will concentrate in a few
countries, regions or cities.
New Economic Geography (NEG)
