Krugman is the author or editor of 27 books, including scholarly works, textbooks, and books for a more general audience, and has published more than 200 scholarly articles in professional journals and edited volumes.[15] He has also written several hundred columns on economic and political issues forThe New York Times,Fortune andSlate. A 2011 survey of economics professors named him their favorite living economist under the age of 60.[16] According to theOpen Syllabus Project, Krugman is the second most frequently cited author on college syllabi for economics courses.[17] As a commentator, Krugman has written on a wide range of economic issues includingincome distribution,taxation,macroeconomics, and international economics. Krugman considers himself amodern liberal, referring to his books, his blog onThe New York Times, and his 2007 bookThe Conscience of a Liberal.[18] His popular commentary has attracted widespread praise and criticism.[19]
On December 6, 2024,New York Times opinion editor Kathleen Kingsbury announced that Krugman was retiring as aTimes columnist;[20] His final column, titled 'Finding Hope in an Age of Resentment,' was published on December 9, 2024.[21] Afterwards, Krugman began publishing a daily newsletter on Substack.[22][23] The newsletter, titled "Paul Krugman," publishes most content for free while offering some exclusive items to paid subscribers. Krugman's wife, economist Robin Wells, serves as his editor for the newsletter. By mid-2025, the newsletter was reaching 350,000-450,000 readers per post, maintaining a substantial audience despite no longer having the institutional backing of a major newspaper. Krugman wrote there that he left theTimes because his editors began to discourage him from writing columns that might "get some people (particularly on the right) riled up."[24]
Krugman was born to a UkrainianJewish family,[25][26] the son of Anita and David Krugman. In 1914, his maternal grandparents immigrated to the United States fromUkraine,[27] while in 1920, his paternal grandparents arrived fromBelarus.[28][29] He was born inAlbany, New York, spent several years of his childhood in theupstate city ofUtica,[30] before growing up from age eight inMerrick, a hamlet inNassau County,Long Island.[31] He graduated fromJohn F. Kennedy High School inBellmore.[32] According to Krugman, his interest in economics began withIsaac Asimov'sFoundation novels, in which the social scientists of the future use a new science of "psychohistory" to try to save civilization. Since present-day science fell far short of "psychohistory", Krugman turned to economics as the next best thing.[33][34]
Krugman later praised his PhD thesis advisor,Rudi Dornbusch, as "one of the great economics teachers of all time" and said that he "had the knack of inspiring students to pick up his enthusiasm and technique, but find their own paths".[38] In 1978, Krugman presented a number of ideas to Dornbusch, who flagged as interesting the idea of a monopolistically competitive trade model. Encouraged, Krugman worked on it and later wrote, "[I] knew within a few hours that I had the key to my whole career in hand".[37] In that same year, Krugman wrote "The Theory of Interstellar Trade", a tongue-in-cheek essay on computing interest rates on goods in transit near the speed of light. He says he wrote it to cheer himself up when he was "an oppressed assistant professor".[39]
Krugman giving a lecture at the German National Library in Frankfurt in 2008
Krugman became an assistant professor at Yale University in September 1977. He joined the faculty at MIT in 1979. From 1982 to 1983, Krugman spent a year working at theReaganWhite House as a staff member of theCouncil of Economic Advisers. He rejoined MIT as a full professor in 1984. Krugman has also taught atStanford and theLondon School of Economics.[40]
In 2000, Krugman joinedPrinceton University as Professor of Economics and International Affairs, where he remained until June 2015. He is also currently Centenary Professor at the London School of Economics, and a member of theGroup of Thirty international economic body.[7] He has been a research associate at theNational Bureau of Economic Research since 1979.[41] Krugman was President of the Eastern Economic Association in 2010.[11] In February 2014, he announced that he would be retiring from Princeton in June 2015 and that he would be joining the faculty at theGraduate Center of the City University of New York.[42]
TheNobel Prize Committee stated that Krugman's main contribution is his analysis of the effects ofeconomies of scale, combined with the assumption that consumers appreciate diversity, on international trade and on the location of economic activity.[9] The importance of spatial issues in economics has been enhanced by Krugman's ability to popularize this complicated theory with the help of easy-to-read books and state-of-the-art syntheses. "Krugman was beyond doubt the key player in 'placing geographical analysis squarely in the economic mainstream' ... and in conferring it the central role it now assumes."[46]
Prior to Krugman's work, trade theory (seeDavid Ricardo andHeckscher–Ohlin model) emphasized trade based on thecomparative advantage of countries with very different characteristics, such as a country with a high agriculturalproductivity trading agricultural products for industrial products from a country with a high industrial productivity. However, in the 20th century, an ever-larger share of trade occurred between countries with similar characteristics, which is difficult to explain by comparative advantage. Krugman's explanation of trade between similar countries was proposed in a 1979 paper in theJournal of International Economics, and involves two key assumptions: that consumers prefer a diverse choice of brands, and that production favors economies of scale.[47] Consumers' preference for diversity explains the survival of different versions of cars like Volvo and BMW. However, because of economies of scale, it is not profitable to spread the production ofVolvos all over the world; instead, it is concentrated in a few factories and therefore in a few countries (or maybe just one).
Graph illustrating Krugman's 'core-periphery' model. The horizontal axis represents costs of trade, while the vertical axis represents the share of either region in manufacturing. Solid lines denote stable equilibria, dashed lines denote unstable equilibria.
Krugman modeled a 'preference for diversity' by assuming aCES utility function like that in a 1977 paper byAvinash Dixit andJoseph Stiglitz.[48][49] Many models of international trade now follow Krugman's lead, incorporating economies of scale in production and a preference for diversity in consumption.[9][50] This way of modeling trade has come to be calledNew Trade Theory.[46]
Krugman's theory also took into account transportation costs, a key feature in producing the "home market effect", which would later feature in his work on the new economic geography. The home market effect "states that,ceteris paribus, the country with the larger demand for a good shall, at equilibrium, produce a more than proportionate share of that good and be a net exporter of it".[46] The home market effect was an unexpected result, and Krugman initially questioned it, but ultimately concluded that the mathematics of the model were correct.[46]
When there are economies of scale in production, it is possible that countries may become 'locked into' disadvantageous patterns of trade.[51] Krugman points out that although globalization has been positive on a whole, since the 1980s the process known as hyper-globalization has at least played a part in rising inequality.[52] Nonetheless, trade remains beneficial in general, even between similar countries, because it permits firms to save on costs by producing at a larger, more efficient scale, and because it increases the range of brands available and sharpens the competition between firms.[53] Krugman has usually been supportive offree trade andglobalization.[54][55] He has also been critical ofindustrial policy, which New Trade Theory suggests might offer nationsrent-seeking advantages if "strategic industries" can be identified, saying it's not clear that such identification can be done accurately enough to matter.[56]
It took an interval of eleven years, but ultimately Krugman's work on New Trade Theory (NTT) converged to what is usually called the "new economic geography" (NEG), which Krugman began to develop in a seminal 1991 paper, "Increasing Returns and Economic Geography", published in theJournal of Political Economy.[57] In Krugman's own words, the passage from NTT to NEG was "obvious in retrospect; but it certainly took me a while to see it. ... The only good news was that nobody else picked up that $100 bill lying on the sidewalk in the interim."[58] This would become Krugman's most-cited academic paper: by early 2009, it had 857 citations, more than double his second-ranked paper.[46] Krugman called the paper "the love of my life in academic work".[59]
The "home market effect" that Krugman discovered in NTT also features in NEG, which interpretsagglomeration "as the outcome of the interaction of increasing returns, trade costs andfactor price differences".[46] If trade is largely shaped byeconomies of scale, as Krugman's trade theory argues, then those economic regions with most production will be more profitable and will therefore attract even more production. That is, NTT implies that instead of spreading out evenly around the world, production will tend to concentrate in a few countries, regions, or cities, which will become densely populated but will also have higher levels of income.[9][14]
Manufacturing is characterized by increasing returns to scale and less restrictive and expansive land qualifications as compared to agricultural uses. So, geographically where can manufacturing be predicted to develop? Krugman states that manufacturing's geographical range is inherently limited by economies of scale, but also that manufacturing will establish and accrue itself in an area of high demand. Production that occurs adjacent to demand will result in lower transportation costs, but demand, as a result, will be greater due to concentrated nearby production. These forces act upon one another simultaneously, producing manufacturing and population agglomeration. Population will increase in these areas due to the more highly developed infrastructure and nearby production, therefore lowering the expense of goods, while economies of scale provide varied choices of goods and services. These forces will feed into each other until the greater portion of the urban population and manufacturing hubs are concentrated into a relatively insular geographic area.[60]
In response to the2008 financial crisis, Krugman proposed, in an informal "mimeo" style of publication,[64] an "international finance multiplier", to help explain the unexpected speed with which the global crisis had occurred. He argued that when, "highly leveraged financial institutions [HLIs], which do a lot of cross-border investment [. ... ] lose heavily in one market ... they find themselves undercapitalized, and have to sell off assets across the board. This drives down prices, putting pressure on the balance sheets of other HLIs, and so on." Such a rapid contagion had hitherto been considered unlikely because of"decoupling" in a globalized economy.[65][66][67] He first announced that he was working on such a model on his blog, on October 5, 2008.[68] Within days of its appearance, it was being discussed on some popular economics-oriented blogs.[69][70]The note was soon being cited in papers (draft and published) by other economists,[71] even though it had not itself been through ordinary peer review processes.
Krugman has done much to revive discussion of theliquidity trap as a topic in economics.[72][73][74][75] He recommended pursuing aggressive fiscal policy andunconventional monetary policy to counter Japan'slost decade in the 1990s, arguing that the country was mired in a Keynesian liquidity trap.[76][77][78] The debate he started at that time over liquidity traps and what policies best address them continues in the economics literature.[79]
Krugman had argued inThe Return of Depression Economics that Japan was in a liquidity trap in the late 1990s, since thecentral bank could not drop interest rates any lower to escape economic stagnation.[80] The core of Krugman's policy proposal for addressing Japan's liquidity trap wasinflation targeting, which, he argued "most nearly approaches the usual goal of modern stabilization policy, which is to provide adequate demand in a clean, unobtrusive way that does not distort the allocation of resources".[78] The proposal appeared first in a web posting on his academic site.[81] This mimeo-draft was soon cited, but was also misread by some as repeating his earlier advice that Japan's best hope was in "turning on the printing presses", as recommended byMilton Friedman, John Makin, and others.[82][83][84]
Krugman has since drawn parallels between Japan's 'lost decade' and thelate 2000s recession, arguing that expansionary fiscal policy is necessary as the major industrialized economies are mired in a liquidity trap.[85] In response to economists who point out that theJapanese economy recovered despite not pursuing his policy prescriptions, Krugman maintains that it was an export-led boom that pulled Japan out of its economic slump in the late-90s, rather than reforms of the financial system.[86]
Krugman was one of the most prominent advocates of the2008–2009 Keynesian resurgence, so much so that economics commentator Noah Smith referred to it as the "Krugman insurgency".[87][88][89]His view that most peer-reviewed macroeconomic research since the mid-1960s is wrong, preferring simpler models developed in the 1930s, has been criticized by some modern economists, likeJohn H. Cochrane.[90] In June 2012, Krugman andRichard Layard launchedA manifesto for economic sense, where they call for greater use of fiscal stimulus policy to reduce unemployment and foster growth.[91] The manifesto received more than four thousand signatures within two days of its launch,[92] and has attracted both positive and critical responses.[93][94]
PresidentGeorge W. Bush poses for a photo with Nobel Prize winners Monday, Nov. 24, 2008, in the Oval Office. Joining President Bush from left are, Dr. Paul Krugman, Economics Prize Laureate; Dr.Martin Chalfie, Chemistry Prize Laureate; and Dr.Roger Tsien, Chemistry Prize Laureate.
The Return of Depression Economics and Analysis of Financial Crises
Krugman's 2008 book The Return of Depression Economics and the Crisis of 2008 argues that the 2008 financial crisis occurred because policymakers had forgotten Depression-era lessons about economic behavior during severe downturns.[95] The book examines several preceding crises—Japan's "lost decade" of the 1990s, the 1997-98 Asian financial crisis, and the 1994 Mexican peso crisis—to demonstrate common patterns of sudden demand collapse and liquidity traps where traditional monetary policy becomes ineffective.[96] Krugman emphasizes that once interest rates approach zero, central banks lose their primary tool for stimulating economic activity, as businesses and households refuse to borrow despite low rates due to uncertainty about the future.[97]The book's central policy recommendation calls for aggressive fiscal intervention during financial crises, including stimulus spending to replace missing private demand, bank recapitalization, and strict financial regulation.[98] Krugman criticizes the pre-2008 economic consensus that viewed Keynesian problems like inadequate demand as historical relics that modern policy had eliminated.[99] His framework proved influential during the COVID-19 pandemic, when governments worldwide implemented large-scale fiscal interventions based partly on his analysis of how economies behave during severe crises and liquidity traps.[100]
Krugman was awarded theNobel Memorial Prize in Economic Sciences (informally the Nobel Prize in Economics), the sole recipient for 2008. This prize includes an award of about $1.4 million and was given to Krugman for his work associated withNew Trade Theory and the New Economic Geography.[101] In the words of the prize committee, "By having integrated economies of scale into explicitgeneral equilibrium models, Paul Krugman has deepened our understanding of the determinants of trade and the location of economic activity."[102]
2014, recipient of theGreen Templeton College, Oxford's Sanjaya Lall Visiting Professorship of Business and Development, Trinity Term 2014, in recognition of his outstanding international reputation in scholarship and research in the field of Development Economics and Business.[117][118]
A May 2011Hamilton College analysis of 26 politicians, journalists, and media commentators who made predictions in major newspaper columns or television news shows from September 2007 to December 2008 found that Krugman was the most accurate. Only nine of the prognosticators predicted more accurately than chance, two were significantly less accurate, and the remaining 14 were no better or worse than a coin flip. Krugman was correct in 15 out of 17 predictions, compared to 9 out of 11 for the next most accurate media figure,Maureen Dowd.[120]
In the 1990s, besides academic books and textbooks, Krugman increasingly began writing books for a general audience on issues he considered important for public policy. InThe Age of Diminished Expectations (1990), he wrote in particular about the increasingUS income inequality in the "New Economy" of the 1990s. He attributes the rise in income inequality in part to changes in technology, but principally to a change in political atmosphere which he attributes toMovement Conservatives.
In September 2003, Krugman published a collection of his columns under the titleThe Great Unraveling about theBush administration's economic and foreign policies and the US economy in the early 2000s. His columns argued that the large deficits during that time were generated by the Bush administration as a result of decreasing taxes on the rich, increasing public spending, and fighting theIraq War. Krugman wrote that these policies were unsustainable in the long run and would eventually generate a major economic crisis. The book was a best-seller.[104][123][124]
In 2007, Krugman publishedThe Conscience of a Liberal, whose title refers toBarry Goldwater'sConscience of a Conservative.[125] It details the history of wealth and income gaps in the United States in the 20th century. The book describes how the gap between rich and poor declined greatly during the middle of the century, and then widened in the last two decades to levels higher even than in the 1920s. InConscience, Krugman argues that government policies played a much greater role than commonly thought both in reducing inequality in the 1930s through 1970s and in increasing it in the 1980s through the present, and criticizes the Bush administration for implementing policies that Krugman believes widened the gap between the rich and poor.
Krugman also argued thatRepublicans owed their electoral successes to their ability to exploit the race issue to win political dominance of the South.[126][127] Krugman argues thatRonald Reagan had used the "Southern Strategy" to signal sympathy for racism without saying anything overtly racist,[128] citing as an example Reagan's coining of the term "welfare queen".[129]
In his book, Krugman proposed a "newNew Deal", which included placing more emphasis on social and medical programs and less on national defense.[130] In his review ofConscience of a Liberal, the liberal journalist and authorMichael Tomasky credited Krugman with a commitment "to accurate history even when some fudging might be in order for the sake of political expediency".[126] In a review forThe New York Times,Pulitzer Prize-winning historianDavid M. Kennedy stated: "Krugman's chapter on the imperative need for health care reform is the best in this book, a rueful reminder of the kind of skilled and accessible economic analysis of which he is capable".[131]
In late 2008, Krugman published a substantial updating of an earlier work, entitledThe Return of Depression Economics and the Crisis of 2008. In the book, he discusses the failure of the United States regulatory system to keep pace with a financial system increasingly out-of-control, and the causes of and possible ways to contain the greatest financial crisis since the 1930s. In April 2012, Krugman publishedEnd This Depression Now!, a book which argues that looking at the available historical economic data, fiscal cuts and austerity measures only deprive the economy of valuable funds that can circulate and further add to a poor economy – people cannot spend, and markets cannot thrive if there is not enough consumption and there cannot be sufficient consumption if there is large unemployment. He argues that while it is necessary to cut debt, it is the worst time to do so in an economy that has just suffered the most severe of financial shocks, and must be done instead when an economy is near full-employment when the private sector can withstand the burden of decreased government spending and austerity. Failure to stimulate the economy either by public or private sectors will only unnecessarily lengthen the current economic depression and make it worse.[132]
Martin Wolf has written that Krugman is both the "most hated and most admired columnist in the US".[133]EconomistJ. Peter Neary has noted that Krugman "has written on a wide range of topics, always combining one of the best prose styles in the profession with an ability to construct elegant, insightful and useful models".[134] Neary added that "no discussion of his work could fail to mention his transition from Academic Superstar to Public Intellectual. Through his extensive writings, including a regular column forThe New York Times, monographs and textbooks at every level, and books on economics and current affairs for the general public ... he has probably done more than any other writer to explain economic principles to a wide audience."[134] Krugman has been described as the most controversial economist in his generation[135][136] and according to Michael Tomasky since 1992 he has moved "from being a center-left scholar to being a liberal polemicist".[126]
During the1992 presidential campaign, Krugman praisedBill Clinton's economic plan inThe New York Times, and Clinton's campaign used some of Krugman's work onincome inequality. At the time, it was considered likely that Clinton would offer him a position in the new administration, but allegedly Krugman's volatility and outspokenness caused Clinton to look elsewhere.[135] Krugman later said that he was "temperamentally unsuited for that kind of role. You have to be very good at people skills, biting your tongue when people say silly things."[137][138] In a Fresh Dialogues interview, Krugman added, "you have to be reasonably organized ... I can move into a pristine office and within three days it will look like a grenade went off."[139]
In 1999, near the height of thedot com boom,The New York Times approached Krugman to write a bi-weekly column on "the vagaries of business and economics in an age of prosperity".[137] His first columns in 2000 addressed business and economic issues, but as the2000 US presidential campaign progressed, Krugman increasingly focused onGeorge W. Bush's policy proposals. According to Krugman, this was partly due to "the silence of the media – those 'liberal media' conservatives complain about ..."[137] Krugman accused Bush of repeatedly misrepresenting his proposals, and criticized the proposals themselves.[137] After Bush's election, and his perseverance with his proposed tax cut in the midst of the slump (which Krugman argued would do little to help the economy but substantially raise the fiscal deficit), Krugman's columns grew angrier and more focused on the administration. AsAlan Blinder put it in 2002, "There's been a kind ofmissionary quality to his writing since then ... He's trying to stop something now, using the power of the pen."[137] Partly as a result, Krugman's twice-weekly column on the Op-Ed page ofThe New York Times has made him, according toNicholas Confessore, "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."[137] In an interview in late 2009, Krugman said his missionary zeal had changed in the post-Bush era and he described the Obama administration as "good guys but not as forceful as I'd like ... When I argue with them in my column this is a serious discussion. We really are in effect speaking across the transom here."[140] Krugman says he's more effective at driving change outside the administration than inside it, "now, I'm trying to make this progressive moment in American history a success. So that's where I'm pushing."[140]
Krugman's columns have drawn criticism as well as praise. A 2003 article inThe Economist[141] questioned Krugman's "growing tendency to attribute all the world's ills to George Bush", citing critics who felt that "his relentless partisanship is getting in the way of his argument" and claiming errors of economic and political reasoning in his columns.[104]Daniel Okrent, a formerThe New York Timesombudsman, in his farewell column, criticized Krugman for what he said was "the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults".[142][143]
Krugman'sNew York Times blog was "The Conscience of a Liberal", devoted largely to economics and politics.
Five days after9/11 terrorist attacks, Krugman argued in his column that the calamity was "partly self-inflicted", citing poor pay and training for airport security driven by the transfer of responsibility for airport security from government to airlines. His column provoked an angry response andThe New York Times was flooded with complaints. According toLarissa MacFarquhar ofThe New Yorker, while some people[who?] thought that he was too partisan to be a columnist forThe New York Times, he was revered on the left.[144][145] Similarly, on the 10th anniversary of the 9/11 attack on the United States, Krugman again provoked a controversy by accusing on hisNew York Times blog former U.S. President George W. Bush and former New York City mayorRudy Giuliani of rushing "to cash in on the horror" after the attacks and describing the anniversary as "an occasion for shame".[146][147]
Krugman was noteworthy for his opposition to the 2016 presidential campaign ofBernie Sanders. On January 19, 2016, he wrote an article which criticized Bernie Sanders for his perceived lack of political realism, compared Sanders' plans for healthcare and financial reform unfavorably to those ofHillary Clinton, and cited criticisms of Sanders from other liberal policy wonks like Mike Konczal andEzra Klein.[148] Later, Krugman wrote an article which accused Sanders of "[going] for easy slogans over hard thinking" and attacking Hillary Clinton in a way that was "just plain dishonest".[149]
On the 12 July 2016, Krugman tweeted "leprechaun economics", in response toCentral Statistics Office (Ireland) data that 2015 GDP grew 26.3% and 2015 GNP grew 18.7%. The leprechaun economics affair (proved in 2018 to be Apple restructuring itsdouble Irish subsidiaries), led to theCentral Bank of Ireland introducing a new economic statistic,Modified gross national income (or GNI*) to better measure the Irish economy (2016 Irish GDP is 143% of 2016 Irish GNI*). The term leprechaun economics has since been used by Krugman,[150][151] and others,[152][153] to describe distorted/unsound economic data.
Krugman's use of the term leprechaun to refer to Ireland and its people has raised rebuke. In June 2021, Krugman wrote an article titled, "Yellen's New Alliance Against Leprechauns".[154] Following the article, the Irish Ambassador to the US,Daniel Mulhall, wrote a letter to his publisher saying, "This is not the first time your columnist has used the word 'leprechaun' when referring to Ireland, and I see it as my duty to point out that this represents an unacceptable slur."[155]
Krugman harshly criticized thefirst Trump administration.[156] He has also remarked several times on how Trump tempts him to assume the worst, such that he has to be careful to check his personal beliefs against the weight of evidence.[citation needed]
In January 2025, speaking on his departure fromThe New York Times the previous month, Krugman said that he found the back-and-forth with his editor had become intrusive and tiresome. He cited "toning down [his] voice" and "pressure for what I considered false equivalence" as complaints, as well as a desire to publish him less often by removing his newsletter. TheColumbia Journalism Review reported that he refused an offer to reduce his regular columns from twice to once a week in exchange for keeping his newsletter.[22]
In a 1994Foreign Affairs article, Paul Krugman argued that it was amyth that the economic successes of theEast Asian 'tigers' constituted an economic miracle. He argued that their rise was fueled by mobilizing resources and that their growth rates would inevitably slow.[157] His article helped popularize the argument made byLawrence Lau andAlwyn Young, among others, that the growth of economies inEast Asia was not the result of new and original economic models, but rather from highcapital investment and increasinglabor force participation, and that total factor productivity had not increased. Krugman argued that in the long term, only increasingtotal factor productivity can lead to sustainedeconomic growth. Krugman's article was highly criticized in many Asian countries when it first appeared, and subsequent studies disputed some of Krugman's conclusions. However, it also stimulated a great deal of research, and may have caused theSingapore government to provide incentives for technological progress.[158]
During the1997-1998 Asian financial crisis, Krugman advocatedcurrency controls as a way to mitigate the crisis. Writing in aFortune magazine article, he suggested exchange controls as "a solution so unfashionable, so stigmatized, that hardly anyone has dared suggest it".[159]Malaysia was the only country that adopted such controls, and although theMalaysian government credited its rapid economic recovery on currency controls, the relationship is disputed.[160] An empirical study found that the Malaysian policies produced faster economic recovery and smaller declines in employment and real wages.[161] Krugman later stated that the controls might not have been necessary at the time they were applied, but that nevertheless "Malaysia has proved a point – namely, that controlling capital in a crisis is at least feasible."[162] Krugman more recently pointed out that emergency capital controls have even been endorsed by the IMF, and are no longer considered radical policy.[163][164][165]
In the early 2000s, Krugman repeatedly criticized theBush tax cuts, both before and after they were enacted. Krugman argued that the tax cuts enlarged the budget deficit without improving the economy, and that they enriched the wealthy – worseningincome distribution in the US.[124][166][167][168][169] Krugman advocated lower interest rates (to promote investment and spending on housing and other durable goods), and increased government spending on infrastructure, military, and unemployment benefits, arguing that these policies would have a larger stimulus effect, and unlike permanent tax cuts, would only temporarily increase the budget deficit.[169][170] In addition, he was against Bush's proposal toprivatize social security.[171]
In August 2005, afterAlan Greenspan expressed concern over housing markets, Krugman criticized Greenspan's earlier reluctance to regulate the mortgage and related financial markets, arguing that "[he's] like a man who suggests leaving the barn door ajar, and then – after the horse is gone – delivers a lecture on the importance of keeping your animals properly locked up."[172] Krugman has repeatedly expressed his view that Greenspan andPhil Gramm are the two individuals most responsible for causing thesubprime crisis. Krugman points to Greenspan and Gramm for the key roles they played in keepingderivatives, financial markets, andinvestment banks unregulated, and to theGramm-Leach-Bliley Act, which repealedGreat Depression era safeguards that preventedcommercial banks, investment banks andinsurance companies from merging.[173][174][175][176]
Krugman also was critical of some of theObama administration's economic policies. He criticized theObama stimulus plan as being too small and inadequate given the size of the economy and the banking rescue plan as misdirected; Krugman wrote inThe New York Times: "an overwhelming majority [of the American public] believes that the government is spending too much to help large financial institutions. This suggests that the administration's money-for-nothing financial policy will eventually deplete its political capital."[177] In particular, he considered the Obama administration's actions to prop up the US financial system in 2009 to be impractical and unduly favorable to Wall Street bankers.[143] In anticipation of President Obama's Job Summit in December 2009, Krugman said in a Fresh Dialogues interview, "This jobs summit can't be an empty exercise ... he can't come out with a proposal for $10 or $20 Billion of stuff because people will view that as a joke. There has to be a significant job proposal ... I have in mind something like $300 Billion."[178]
Krugman has criticized China'sexchange rate policy, which he believes to be a significant drag on global economic recovery from theLate-2000s recession, and he has advocated a "surcharge" on Chinese imports to the US in response.[179] Jeremy Warner ofThe Daily Telegraph accused Krugman of advocating a return to self-destructiveprotectionism.[180]
In April 2010, as the Senate began considering new financial regulations, Krugman argued that the regulations should not only regulate financial innovation, but also tax financial industry profits and remuneration. He cited a paper byAndrei Shleifer andRobert Vishny released in draft form the previous week, which concludes that most innovation was in fact about "providing investors with false substitutes for [traditional] assets like bank deposits", and once investors realize the sheer number of securities that are unsafe a "flight to safety" occurs which necessarily leads to "financial fragility".[181][182]
In his June 28, 2010, column inThe New York Times, in light of the recentG-20 Toronto Summit, Krugman criticized world leaders for agreeing to halve deficits by 2013. Krugman claimed that these efforts could lead the global economy into the early stages of a "third depression" and leave "millions of lives blighted by the absence of jobs". He advocated instead the continued stimulus of economies to foster greater growth.[183]
During theGreat Recession, he remarked that he is "gravitating towards aKeynes-Fisher-Minsky view of macroeconomics".[193]Post-Keynesian observers cite commonalities between Krugman's views and those of thePost-Keynesian school,[194][195][196] although Krugman has been critical of some Post-Keynesian economists such asJohn Kenneth Galbraith – whose worksThe New Industrial State (1967) andEconomics in Perspective (1987) Krugman has referred to as not "real economic theory" and "remarkably ill-informed" respectively.[197] In recent academic work, he has collaborated with Gauti Eggertsson on a New Keynesian model of debt-overhang and debt-driven slumps, inspired by the writings ofIrving Fisher,Hyman Minsky, andRichard Koo. Their work argues that during a debt-driven slump, the "paradox of toil", together with theparadox of flexibility, can exacerbate aliquidity trap, reducing demand and employment.[198]
Krugman's support forfree trade in the 1980s–1990s provoked some ire from theanti-globalization movement.[199][200][201] In 1987 he quipped that, "If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'."[202][203] However, Krugman argues in the same article that, given the findings of New Trade Theory, "[free trade] has shifted from optimum to reasonable rule of thumb ... it can never again be asserted as the policy that economic theory tells us is always right." In the article, Krugman comes out in favor of free trade given the enormous political costs of actively engaging instrategic trade policy and because there is no clear method for a government to discover which industries will ultimately yield positive returns. He also notes that increasing returns and strategic trade theory do not disprove the underlying truth ofcomparative advantage. In 1994, Krugman criticized the notion of national competitiveness, particularly comparisons of nations as competing corporations. Krugman noted that a country's economic success does not need to come at the expense of a rival nation, as if they were two competing companies selling similar products. Instead, foreign nations typically serve as export markets for a nation's goods, as well as suppliers of useful imports.[204]
In the midst of the 2009 Great Recession, Krugman made a significant departure from his general support for free trade, entertaining the idea of a 25% tariff on Chinese imports as a retaliation for China's policy of maintaining a low value for therenminbi, which many saw as hostile currency manipulation, artificially making their exports more competitive.[205]
In 2015, Krugman noted his ambivalence about the proposedTrans-Pacific Partnership, as the agreement was not mainly about trade and, "whatever you may say about the benefits of free trade, most of those benefits have already been realized" [by existing agreements].[206]
After the 2016 elections, and Trump's moves towards protectionism, he wrote that while protectionism can make economies less efficient and reduce long-term growth, it would not directly cause recessions. He noted that if there is a trade war, imports would decrease as much as exports, so employment should not be strongly impacted, at least in the medium to long run.[207] He believes that the US should not repeat Reagan's 1981 policy on taxes and quotas on imported products,[208] as even if it does not produce a recession, protectionism would shock "value chains" and disrupt jobs and communities in the same way as free trade in the past. In addition, other countries would take retaliatory measures against US exports.[209] Krugman recommended against the abandonment of NAFTA, because it could cause economic losses and disruptions to businesses, jobs, and communities.[210]
In the late 2010s, Krugman admitted that the models that scholars used to measure the impact ofglobalization in the 1990s underestimated the effect on jobs and inequality in developed countries such as the US.[211][212] He noted that although free trade has harmed some industries, communities, and some workers, it remains a win-win system overall, enriching both parties to the agreement at the national level; a trade war is equivalently negative for the nations involved, even while it may benefit some individuals or industries within each nation.[213]
In 2006, Krugman wrote: "[i]mmigration reduces the wages of domestic workers who compete with immigrants. That's just supply and demand: we're talking about large increases in the number of low-skill workers relative to other inputs into production, so it's inevitable that this means a fall in wages ... the fiscal burden of low-wage immigrants is also pretty clear," citing an estimate of 0.25% of GDP from theNational Research Council.[214] However, in 2024, he reported that "most labor economists now believe that immigrants don’t do much head-to-head competition with native-born workers; they bring different skills and take different jobs. And the past few years, with elevated immigration, have also been an era of exceptional growth in wages for the worst paid."[215]
Krugman has called for a transition to agreen economy.[216][217] He supported theGreen New Deal,[218] asserting "I believe progressives should enthusiastically embrace the G.N.D.".[219] He said that a "Green New Deal stuff is investment. On that stuff, don't worry about paying for it. Debt as an issue is vastly overstated, and a lot of these things pay for themselves. Go ahead and just deficit finance it."[220] In 2021, he wrote that "we will almost surely have to put a price" ongreenhouse gas emissions.[221] He criticized Democratic "moderates" and corporations "torpedoing efforts to avoid a civilization-threatening crisis because you want to hold down your tax bill".[222]
Krugman describes himself asliberal and has explained that he views the term "liberal" in the American context to mean "more or less whatsocial democratic means in Europe".[125] In a 2009Newsweek article,Evan Thomas described Krugman as having "all the credentials of a ranking member of the East coast liberal establishment" but also as someone who is anti-establishment, a "scourge of the Bush administration", and a critic of the Obama administration.[143] In 1996,Newsweek'sMichael Hirsh remarked, "Say this for Krugman: though an unabashed liberal ... he's ideologically colorblind. He savages the supply-siders of the Reagan–Bush era with the same glee as he does the 'strategic traders' of the Clinton administration."[135]
Krugman has at times advocated free markets in contexts where they are often viewed as controversial. He has written againstrent control andland-use restrictions in favor of market supply and demand,[223][224] likened the opposition against free trade and globalization to the opposition against evolution vianatural selection (1996),[200] opposedfarm subsidies,[225] argued thatsweatshops are preferable to unemployment,[54] dismissed the case forliving wages (1998),[226] and argued against mandates, subsidies, and tax breaks forethanol (2000).[227] In 2003, he questioned the usefulness ofNASA's crewed space flights given the available technology and their high financial cost compared to their general benefits.[228] Krugman has also criticized U.S. zoning laws[229] and European labor market regulation.[230][231]
Krugman endorsed Democratic candidateHillary Clinton in the run-up to the 2016 U.S. presidential election.[232]
Krugman has criticized theRepublican Party leadership for what he sees as a strategic (but largely tacit) reliance on racial divisions.[233][234][235] In hisConscience of a Liberal, he wrote:
The changing politics of race made it possible for a revived conservative movement, whose ultimate goal was to reverse the achievements of the New Deal, to win national elections – even though it supported policies that favored the interests of a narrow elite over those of middle- and lower-income Americans.[236]
Krugman worked forMartin Feldstein when the latter was appointed chairman of theCouncil of Economic Advisers and chief economic advisor to PresidentRonald Reagan. He later wrote in an autobiographical essay, "It was, in a way, strange for me to be part of the Reagan Administration. I was then and still am an unabashed defender of thewelfare state, which I regard as the most decent social arrangement yet devised."[37] Krugman found the time "thrilling, then disillusioning". He did not fit into the Washington political environment and was not tempted to stay on.[37]
According to Krugman,Gordon Brown and his party were unfairly blamed for the2008 financial crisis.[237] He has also praised the formerBritish prime minister, whom he described as "more impressive than any US politician" after a three-hour conversation with him.[238] Krugman asserted that Brown "defined the character of the worldwide financial rescue effort" and urged British voters not to support the oppositionConservative Party in the2010 general election, arguing their Party LeaderDavid Cameron "has had little to offer other than to raise the red flag of fiscal panic".[237][239]
Krugman has been a vocal critic ofDonald Trump, and both his presidential administrations.[240][241] His criticisms have included the president's climate change proposals, economic policy,[242] the Republican tax plan and Trump's foreign policy initiatives. Krugman often used his op-ed column inThe New York Times to set out arguments against the president's policies. On election night in 2016, Krugman wrongly predicted in aNew York Timesop-ed that the markets would never recover under Trump and stated "first-pass answer is never"[243][244] but retracted the call in the same publication three days later.[245] Trump gave him a 'Fake News Award'. Krugman stated "I get a 'fake news award' for a bad market call, retracted 3 days later, from 2000-lie man, who still won't admit he lost the popular vote. Sad!"[246]
In hisNew York Times column, Krugman described Russia as a "Potemkin superpower" in reaction to the2022 Russian invasion of Ukraine. He stated that "Russia is even weaker than most people, myself included, seem to have realized", that the military performance of Russia "has been less effective than advertised" in a stalemate at the beginning of the invasion, and that Russia encountered serious logistical problems. Krugman observed that the country's totalgross domestic product is only a bit more than half as large as those of countries such as Britain and France, despite Russia's greater landmass, total population and natural resource endowment. He also noted that Russia's economy was further weakened byinternational sanctions as a result of the war. He concluded that Russia had "far less real strength than meets the eye."[247]
Krugman opposed the2003 invasion of Iraq.[248] He wrote in hisNew York Times column: "What we should have learned from the Iraq debacle was that you should always be skeptical and that you should never rely on supposed authority. If you hear that 'everyone' supports a policy, whether it's a war of choice or fiscal austerity, you should ask whether 'everyone' has been defined to exclude anyone expressing a different opinion."[249]
In 2012, Krugman praisedPeter Beinart’sThe Crisis of Zionism as a "brave book," criticizing the policies ofBenjamin Netanyahu’s government.[a][250] In 2024, amidst theGaza war, Krugman wrote that Netanyahu’s government was "killing huge numbers of civilians" but expressed skepticism at PresidentJoe Biden’s ability to stop the body count,[251] but did not elaborate, having said in 2012 that "like many liberal American Jews — and most American Jews are still liberal — I basically avoid thinking about where Israel is going."
In 1998 during thedot-com bubble, Krugman wrote a commentary forRed Herring that urged skepticism of optimistic predictions for technology-driven progress. He followed it with several pessimistic predictions of his own, including that "[b]y 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than thefax machine's"[252][253][254][255] and that the number of jobs for IT specialists would decelerate and turn down.[254] In a 2013 interview, Krugman stated that the predictions were meant to be "fun and provocative, not to engage in careful forecasting".[256]
Krugman is a vocalcritic of Bitcoin,[256] arguing against its economic soundness since 2011.[257][258] In 2017, he predicted that Bitcoin is a more obvious bubble than housing and stated that "[t]here's been no demonstration yet that it actually is helpful in conducting economic transactions".[259]
In December 2022 Krugman predicted that, because ofgenerative AI such asChatGPT, "quite a few knowledge jobs may be eminently replaceable". He suggested that such technology would likely prove beneficial "in the long run", but that "in the long run, we are all dead, and even before that, some of us may find ourselves either unemployed or earning far less than we expected".[260]
Krugman has been married twice. His first wife, Robin L. Bergman, is a designer.[261][262] He is currently married toRobin Wells, an academic economist who received her BA from theUniversity of Chicago and her PhD from theUniversity of California, Berkeley.[263] She, like Krugman, taught atMIT. Together, Krugman and his wife have co-authored several economics textbooks. In early 2007, rumors began circulating that Krugman's "son" was working forHillary Clinton's campaign. However, Krugman clarified in his op-ed column for theNew York Times that he and his wife do not have any children.[264][265][1]
Krugman currently lives in New York City.[266] Upon retiring from Princeton after fifteen years of teaching in June 2015, he addressed the issue in his column, stating that while he retains the utmost praise and respect for Princeton, he wishes to reside in New York City and hopes to focus more on public policy issues.[267] He subsequently became a professor at theGraduate Center of the City University of New York and a distinguished scholar at the Graduate Center'sLuxembourg Income Study Center.[267][268]
Krugman reports that he is a distant relative of conservative journalistDavid Frum.[269] He has described himself as a "Loner. Ordinarily shy. Shy with individuals."[270]
Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1985), withElhanan Helpman.ISBN978-0-262-08150-4
Currency Crises (National Bureau of Economic Research Conference Report) (September 2000),ISBN0-226-45462-2
Trade with Japan: Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1995),ISBN0-226-45459-2
Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April 1994), co-edited with Alasdair Smith.ISBN0-226-45460-6
Exchange Rate Targets and Currency Bands (October 1991), co-edited with Marcus Miller.ISBN0-521-41533-0
Strategic Trade Policy and the New International Economics (January 1986),ISBN0-262-11112-8
^Something I’ve been meaning to do — and still don’t have the time to do properly — is say something about Peter Beinart’s brave book The Crisis of Zionism.
The truth is that like many liberal American Jews — and most American Jews are still liberal — I basically avoid thinking about where Israel is going. It seems obvious from here that the narrow-minded policies of the current government are basically a gradual, long-run form of national suicide — and that’s bad for Jews everywhere, not to mention the world. But I have other battles to fight, and to say anything to that effect is to bring yourself under intense attack from organized groups that try to make any criticism of Israeli policies tantamount to anti-Semitism.
But it’s only right to say something on behalf of Beinart, who has predictably run into that buzzsaw. As I said, a brave man, and he deserves better.
^Note: Krugman modeled a 'preference for diversity' by assuming aCES utility function like that in A. Dixit and J. Stiglitz (1977), 'Monopolistic competition and optimal product diversity',American Economic Review 67.
^Krugman, Paul (February 28, 2014),"Changes (Personal/Professional)",The New York Times,archived from the original on July 26, 2014, retrievedJuly 18, 2014,I have informed Princeton that I will be retiring at the end of next academic year, that is, in June 2015. In August 2015 I will join the faculty of the Graduate Center, City University of New York, as a professor in the Ph.D. program in economics. I will also become a distinguished scholar at the Graduate Center's Luxembourg Income Study Center.
^"Sources of international friction and cooperation in high-technology development and trade." National Academies Press, 1996, p. 190
^Paul Krugman (December 13, 2009). "Paul Samuelson, RIP".The New York Times.One of the things Robin Wells and I did when writing our principles of economics textbook was to acquire and study a copy of the original, 1948 edition of Samuelson's textbook.
^LSE Staff (2023)."Paul Krugman".London School of Economics and Political Science. RetrievedAugust 30, 2023.
^Rosser, J. Barkley (2011). "2: The New Economic Geography Approach".Monopolistic Competition and Optimum Product Diversity. Springer. p. 24.The workhorse model of this approach since 1991 has been the model of monopolistic competition due to Avinash Dixit and Joseph Stiglitz (1977). It was used by Paul Krugman (1979, 1980) to provide an approach to analyzing increasing returns in international trade.
^(He writes on p. xxvi of his bookThe Great Unraveling that "I still have the angry letterRalph Nader sent me when I criticized his attacks on globalization.")
^Strategic trade policy and the new international economics, Paul R. Krugman (ed), The MIT Press, p. 18,ISBN978-0-262-61045-2
^Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Lance Taylor, Harvard University Press, p. 159: "Kregel (2000) points out that there are at least three theories of the liquidity trap in the literature – Keynes own analyses ... Hicks' [in] 1936 and 1937 ... and a view that can be attributed to Fisher in the 1930s and Paul Krugman in latter days"
^ab"Nobelpristagaren i ekonomi 2008: Paul Krugman"Archived September 10, 2013, at theWayback Machine, speech by Paul Krugman (Retrieved December 26, 2008) 00:43 "The title of The Conscience of a Liberal ... is a reference to a book published almost 50 years ago in the United States called TheConscience of a Conservative by Barry Goldwater. That book is often taken to be the origin, the start, of a movement that ended up dominating U.S. politics that reached its first pinnacle underRonald Reagan and then reached its full control of the U.S. government for most of the last eight years."
^Paul Krugman (September 16, 2001)."Reckonings; Paying the Price".The Conscience of a Liberal.Archived from the original on January 14, 2011. RetrievedOctober 5, 2011.
^Paul Krugman (September 11, 2011)."The Years of Shame".The Conscience of a Liberal.Archived from the original on October 8, 2011. RetrievedOctober 5, 2011.
^Paul Krugman (January 19, 2016)."Weakened at Bernie's".The Conscience of a Liberal.Archived from the original on May 29, 2017. RetrievedApril 21, 2017.
^Dana, Will (March 23, 2003)."Voodoo Economics".Rolling Stone. Archived fromthe original on August 29, 2009. RetrievedAugust 1, 2009.
^Lehrke, Dylan Lee (October 9, 2003)."Krugman blasts Bush".The Daily of the University of Washington. Archived fromthe original on October 9, 2009. RetrievedAugust 1, 2009.
^Dale, Leigh; Gilbert, Helen (2007).Economies of representation, 1790–2000: colonialism and commerce. Ashgate Publishing, Ltd. pp. 200–01.ISBN978-0-7546-6257-0. "[Krugman and Obstfeld] seem to want to shame students into believing that there are no well-grounded arguments against coercing poor countries into free trade. ... This is poor logic, and pernicious insensitivity."
Paul Krugman, "The American Way of Economic War: Is Washington Overusing Its Most Powerful Weapons?" (review ofHenry Farrell andAbraham Newman,Underground Empire: How America Weaponized the World Economy, Henry Holt, 2023, 288 pp.),Foreign Affairs, vol. 103, no. 1 (January/February 2024), pp. 150–156. "The [U.S.] dollar is one of the few currencies that almost all major banks will accept, and... the most widely used... As a result, the dollar is the currency that many companies must use... to do international business." (p. 150.) "[L]ocal banks facilitating that trade... normally... buy U.S. dollars and then use dollars to buy [another local currency]. To do so, however, the banks must have access to the U.S. financial system and... follow rules laid out by Washington." (pp. 151–152.) "But there is another, lesser-known reason why the [U.S.] commands overwhelming economic power. Most of the world'sfiber-optic cables, which carry data and messages around the planet, travel through the United States." (p. 152.) "[T]he U.S. government has installed 'splitters':prisms that divide the beams of light carrying information into two streams. One... goes on to the intended recipients, ... the other goes to theNational Security Agency, which then uses high-poweredcomputation to analyze the data. As a result, the [U.S.] can monitor almost all international communication." (p. 154) This has allowed the U.S. "to effectively cutIran out of the world financial system... Iran's economy stagnated... Eventually, Tehran agreed to cut back itsnuclear programs in exchange for relief." (pp. 153–154.) "[A] few years ago, American officials... were in a panic about [the Chinese company]Huawei... which... seemed poised to supply5G equipment to much of the planet [thereby possibly] giv[ing] China the power to eavesdrop on the rest of the world – just as the [U.S.] has done.... The [U.S.] learned that Huawei had been dealing surreptitiously with Iran – and therefore violating U.S. sanctions. Then, it... used its special access to information on international bank data to [show] that [Huawei]'schief financial officer,Meng Wanzhou (... the founder's daughter), had committedbank fraud by falsely telling the Britishfinancial services companyHSBC that her company was not doing business with Iran. Canadian authorities, acting on a U.S. request, arrested her... in December 2018. After... almost three years under house arrest... Meng... was allowed to return to China... But by [then] the prospects for Chinese dominance of 5G had vanished..." (pp. 154–155.) Farrell and Newman, writes Krugman, "are worried about the possibility of [U.S.Underground Empire] overreach. [I]f the [U.S.] weaponizes the dollar against too many countries, they might... band together and adopt alternative methods of international payment. If countries become deeply worried about U.S. spying, they could lay fiber-optic cables that bypass the [U.S.]. And if Washington puts too many restrictions on American exports, foreign firms might turn away from U.S. technology." (p. 155.)
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