Congratulations...... Prof. Paul Krugman for winning the Nobel Prize 2008

US economist Paul Krugman, a fierce critic of President George W. Bush's handling of the global financial crisis, on Monday won the 2008 Nobel Economics Prize.
The 55-year-old Princeton University professor, and a New York Times columnist, has worked intensely on the impact of free trade and globalisation, as well as the driving forces behind urbanisation, the Nobel citation said.
The Nobel Prize citation highlights two distinct but connected contributions: Mr. Krugman’s development of the “new trade theory” and his work on the “new economic geography.”
The Nobel committee hailed Krugman's economic approach "based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale."
The theory shows that globalisation tends to increase pressure on urban living because specialisation sucks people into centres of concentration in which "regions become divided into a high-technology urbanised core and a less developed 'periphery'," the Nobel jury said.

Traditional trade theory assumes that differences between countries explain why some nations export agricultural products while others export industrial goods. Such a process holds out the prospect that some countries can improve their situations through complementarity.
He set out to explain why worldwide trade was dominated by a few countries that were similar to one another, and why a country might import the same kinds of goods it exported.
In his model, many companies sell similar goods with slight variations. These companies become more efficient at producing their goods as they sell more, and so they grow. Consumers like variety, and pick and choose goods from among these producers in different countries, enabling countries to continue exchanging similar products.

But Krugman's theory clarifies why worldwide trade is in fact dominated by countries which not only have similar conditions, but also trade in similar products.
In his latest book, "The Conscience of a Liberal," Krugman argues for "a new New Deal" by reducing inequality in the United States and expanding the social safety net first created through programmes initiated under Franklin D. Roosevelt in the 1930s.
In 1991, he received the John Bates Clark Medal, an award given every two years by the American Economic Association to an economist under 40. Mr. Krugman’s 1991 Journal of Political Economy paper, “Increasing Returns and Economic Geography,” is the first article that provides a clear, internally consistent mathematically rigorous framework for thinking simultaneously about trade and the location of people and firms across space. The model begins with the same basic elements as the new trade theory: monopolistic competition, scale economics, love of variety. To these elements Mr. Krugman adds free migration of workers across space and industries. Because workers are able to move, real wages equalize across space. People in New York City may be paid more, but they give some of that back in the form of higher housing prices. The paper provides economists with a clear framework that can make sense of where we all live. Firms and workers are pulled toward the same location to reduce transportation costs of shipping goods. For example, the garment industry located in New York City, in part because of the vast trade in textiles that was already moving through the city and because of the large number of customers already living in America’s largest city.

Congratulations to Krugman. Now that he's won the Nobel, I would appreciate it if he would get back to work and brainstorm a way out of the current global financial meltdown.