Trade and Development Blog

Princeton University economist Paul Krugman was awarded this year's Nobel Prize in Economics “for his analysis of trade patterns and location of economic activity.” This topic and Krugman's work turns out to be incredibly central to the study of economic development, as we will be discussing in class precisely this week (in Eco 330) and next (in Eco 730). Here is Freakonomics blogger Justin Wolfers with more detail on some of his contributions, and his more recent public profile as a New York Times columnist : Krugman’s accumulated scientific writings amount to an astonishing contribution. As an international economist, he has been working the same intellectual fields as giants like Ricardo, Samuelson, and Ohlin. Before Krugman, it was hard to believe that there was a lot more to be learned about trade theory, and the profession had moved on to what many believed were more fertile fields. Krugman’s insights helped bring trade theory into closer connection with data on how t...

On Wed Sept 24th at 2:30pm the Hunter Economics Department will host an informal panel discussion on the current turmoil in financial markets. Room to be announced here soon. 

Remember the term 'liquidity trap' from your Eco 100 discussion of the Great Depression? Paul Krugman fears we might be entering one right about now.. based upon amongst other things, the sudden one day dive in yields on US treasuries: This suggests investors flight to safe investments even if they yield very little at all, which in turn clearly signals their lack of interest in making most other types of loans that would normally be part of the money creation process. In such situations the Federal Reserve loses their ability to control the money supply. update 9/18: Paul Krugman checks the markets again this morning and finds that the return on the three month treasury is negative ! People are willing to pay $100 today for a treasury bill that pays less than $100 in three months time! As he points out, this didn't even happen in the Great Depression. No surprise then to hear this 3am announcement that "the world's biggest central banks planned to pump...