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US Economist Paul Krugman Wins Nobel Prize

American economist Paul Krugman won this year's Nobel economics award, the last in a series of 2008 Nobels handed out over the past week. From Paris, Lisa Bryant reports for VOA that Krugman was cited by the Nobel committee for his analysis of how economies of scale can affect trade patterns and the location of economic activity.

The Nobel committee awarded this year's Nobel to Princeton University professor Paul Krugman for his theories to answer questions about free trade and
globalization. Among other things, the committee said in its statement, Krugman's ideas were based on economies of scale - that it's cheaper to produce things in mass.

And his theories also explain why trade is dominated by countries with similar economic conditions and countries that trade in similar products. The committee said Sweden - which both imports and makes cars - is a case in point.

In a telephone interview after the announcement, the U.S. economist said the award would enhance his visibility. And he described the current global economic turmoil as terrifying.

Krugman comments on politics as well as economics as an analyst for the New York Times newspaper. He has sharply criticised the Bush administration on a number of
issues - including the US-led war in Iraq.

Krugman spoke on ABC Television on Sunday before he won the Nobel prize and was asked about the world coming together to solve the current financial crisis.

"I mean, if something doesn't come out by late today, you know, I mean we don't know but it's very scary, and I have to say it's been really disappointing," Krugman said. "The communique, the big G-7, the big powers, released a communique on Friday which was boilerplate; it was not an actual plan, it was.... in fact, if you're used to reading communiques which alas I am, it had all the signs of basic disagreements papered over, so this is not good. You know, at each stage during this crisis, policy has been less than people expected, and that builds up a cumulative loss of credibility here. You know, I just heard someone this morning that somebody from Treasury is saying 'well we plan to begin these equity injections into banks within two weeks.' Two weeks! You know, Gordon Brown in Britain announced a plan on Wednesday, and they're going to do the equity injections in Britain tomorrow."

Krugman's $1.4 million award ends the series of Nobels for this year. Last week, the Nobels for physics, chemistry, mathematics, literature and peace were awarded.