Paul Romer

Verified Timeline

Lore & Background

Krugman was born to a Russian Jewish family in Albany, New York, and grew up from age eight in Merrick, a hamlet on Long Island. He credits Isaac Asimov's Foundation novels with sparking his interest in economics—the fictional science of psychohistory seemed an ideal he could never reach, so he turned to economics as the next best thing. He earned his BA summa cum laude in economics from Yale in 1974 as a National Merit Scholar, then completed his PhD at MIT in 1977 with a thesis titled 'Essays on Flexible Exchange Rates.' While at MIT, he spent three months in the summer of 1976 working for the Central Bank of Portugal during the chaotic aftermath of the Carnation Revolution. His PhD advisor, Rudi Dornbusch, whom Krugman later called 'one of the great economics teachers of all time,' encouraged him in 1978 to develop a monopolistically competitive trade model. Krugman recalled knowing within hours that he had 'the key to my whole career in hand.' He also wrote 'The Theory of Interstellar Trade' that same year, a tongue-in-cheek essay on computing interest rates on goods traveling near the speed of light, to cheer himself up as an 'oppressed assistant professor.'

Reader's Guide

Krugman's significance lies in his foundational contributions to new trade theory and new economic geography. Prior to his work, trade theory emphasized comparative advantage between countries with very different characteristics. Krugman's 1979 paper explained trade between similar countries using two key assumptions: consumers prefer a diverse choice of brands, and production favors economies of scale. He modeled a 'preference for diversity' using a CES utility function from a 1977 paper by Avinash Dixit and Joseph Stiglitz. His theory also incorporated transportation costs, producing the 'home market effect,' where the country with larger demand for a good ends up producing a more than proportionate share and becoming a net exporter. The Nobel committee cited his work explaining patterns of international trade and geographic distribution of economic activity by examining economies of scale and consumer preferences for diverse goods and services. Krugman points out that although globalization has been positive overall, hyper-globalization since the 1980s has played a part in rising inequality. Nonetheless, trade remains beneficial even between similar countries because it permits firms to save on costs through larger-scale production and increases the range of brands available.

Did You Know?

• Krugman's interest in economics began with Isaac Asimov's Foundation novels, where the fictional science of 'psychohistory' inspired him to study economics as the next best thing.
• In 1978, Krugman wrote 'The Theory of Interstellar Trade,' a tongue-in-cheek essay on computing interest rates on goods traveling near the speed of light, to cheer himself up as an 'oppressed assistant professor.'
• Krugman spent the summer of 1976 working for the Central Bank of Portugal during the chaotic aftermath of the Carnation Revolution, as part of a small group of MIT students.
• His final New York Times column, published December 9, 2024, was titled 'Finding Hope in an Age of Resentment.'
• By mid-2025, Krugman's Substack newsletter was reaching 350,000-450,000 readers per post, with his wife Robin Wells serving as editor.

Scholarly Achievements and the Nobel Prize

Krugman's academic career began as an assistant professor at Yale in September 1977, followed by joining MIT in 1979. 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 rejoined MIT as a full professor in 1984, and in 2000 joined Princeton University as Professor of Economics and International Affairs, retiring from there in June 2015 with the title of professor emeritus. He is also Centennial Professor at the London School of Economics and a member of the Group of Thirty. He has been a research associate at the National Bureau of Economic Research since 1979 and was President of the Eastern Economic Association in 2010. In February 2014, he announced he would join the faculty at the Graduate Center of the City University of New York. His scholarly reputation spans international trade, economic geography, liquidity traps, and currency crises. The Nobel committee awarded him the sole 2008 prize for his contributions to new trade theory and new economic geography, citing his analysis of economies of scale and consumer preferences for diversity. His textbook International Economics: Theory and Policy, co-authored with Maurice Obstfeld, is a standard undergraduate reference, and the Research Papers in Economics project ranks him among the world's most influential economists.

Early Life and the Spark of Curiosity

Born in Albany, New York, in 1953 to a Russian Jewish family, Krugman spent several childhood years in Utica before growing up from age eight in Merrick, a hamlet in Nassau County, Long Island. He graduated from John F. Kennedy High School in Bellmore. His interest in economics began with Isaac Asimov's Foundation novels, where social scientists use 'psychohistory' to try to save civilization. Since present-day science fell short, Krugman turned to economics as the next best thing. He earned his BA summa cum laude in economics from Yale in 1974 as a National Merit Scholar, then pursued a PhD at MIT, completing it in 1977 with a thesis on flexible exchange rates. In the summer of 1976, he was part of a small group of MIT students sent to work for the Central Bank of Portugal during the chaotic aftermath of the Carnation Revolution. He later praised his PhD advisor Rudi Dornbusch as 'one of the great economics teachers of all time,' saying Dornbusch had 'the knack of inspiring students to pick up his enthusiasm and technique, but find their own paths.' In 1978, Krugman presented ideas to Dornbusch, who flagged the monopolistically competitive trade model as interesting. Krugman worked on it and later wrote that he knew within hours he had 'the key to my whole career in hand.'

The Columnist Years and a New Chapter

From 2000 to 2024, Krugman served as a columnist for The New York Times, writing several hundred columns on economic and political issues including income distribution, taxation, macroeconomics, and international economics. He also wrote for Fortune and Slate. He considers himself a modern liberal, a label he reinforced in his 2007 book The Conscience of a Liberal. His commentary attracted widespread praise and criticism. On December 6, 2024, New York Times opinion editor Kathleen Kingsbury announced Krugman was retiring as a columnist. His final column, titled 'Finding Hope in an Age of Resentment,' was published on December 9, 2024. Afterwards, Krugman began publishing a daily newsletter on Substack titled 'Paul Krugman,' which publishes most content for free while offering a longer weekly tutorial post to paid subscribers. His wife, economist Robin Wells, serves as his editor. By mid-2025, the newsletter was reaching 350,000-450,000 readers per post. Krugman wrote there that he left the Times because his editors began to discourage him from writing columns that might 'get some people (particularly on the right) riled up.'

A Prolific Output and Lasting Influence

Krugman is the author or editor of 27 books, including scholarly works, textbooks, and books for a general audience, and has published more than 200 scholarly articles in professional journals and edited volumes. His textbook International Economics: Theory and Policy, co-authored with Maurice Obstfeld, is a standard undergraduate textbook on international economics. He also co-authored an undergraduate economics text with Robin Wells, which he says was strongly inspired by the first edition of Paul Samuelson's classic textbook. A 2011 survey of economics professors named him their favorite living economist under the age of 60. According to the Open Syllabus Project, Krugman is the second most frequently cited author on college syllabi for economics courses. He has been a research associate at the National Bureau of Economic Research since 1979, a member of the Group of Thirty, and has taught at Stanford and the London School of Economics. The Research Papers in Economics project ranks him among the world's most influential economists.