• Stanford University

  Filed under News
  Mar 28

  Krurgman, born in 1953, has been awarded the highest award for his contribution to science and analysis of trade patterns and location of economic activity. This professor at Stanford University is also a contributor to The New York Times, since 2001, and from his column has repeatedly criticized some decisions of George W. Bush. This is one of the economists prestigious and influential in the world and won the 1991 John Bates Clack medal, awarded every two years by the American Economical association. As indicated by the above information is important to enter the scope, impact and generates his theory that states that trade patterns and location has always been key issues in the economic debate.

  What are the effects of free trade and globalization? What forces are influencing the exponential growth of urban areas across the globe? U.S. professor has developed a new theory to answer these questions, for which has crossed the research data from international trade with economic geography. Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in long series, the stuff of economies of scale, while consumers have to demand an increasing variety of goods and services.

  As a result, production small-scale local economies is being progressively replaced by large-scale production of the world economy, dominated by companies that manufacture similar products and competing. Classical theories on trade patterns argue that countries are different, which explains why some nations export agricultural products while others export industrial goods or steel, for example. But a review of Krugman offers an explanation as to why trade is dominated by countries characterized not only by having similar economic conditions, as argued by the classics, but also for dealing in similar products, one example is Sweden, which both Car imports and exports. According to the professor, this trade makes specialization in large-scale production, which in turn reflected in a decrease in prices and growing a wide variety of consumer goods.

  Economies of scale combined with low transport rates also help explain why people tend to focus on making cities and economic tasks in similar geographic locations. low prices and transport can lead to self-reinforcing these processes through which the metropolitan population growth contribute to the increase in large-scale production, which in turn causes an increase in real wages and a greater diversity of supply of goods and goods: that is stimulated migration to cities. Krugman’s theories have shown that the consequence will be the growth of urban areas increasingly divided into two areas, much like Silicon Valley in California: an area dominated by high technology, surrounded by an expanding periphery much less developed. In 2007, the theory of the mechanisms Recall that last year, the winners were Americans Leonid Hurwicz, University of Minnesota, Eric S. Maskin, Institute for Advanced Study in Princeton and Roger B. Myerson, University of Chicago, for their joint contribution to establishing the foundations of the theory for the design of mechanisms, which explains why some business models are more efficient than others.

  “In his first remarks after receiving the prize, Krugman referred to the current global economic crisis and said that although the world economy could face a large-scale recession, surely you can avoid collapse. The winner also praised the efforts of world leaders to overcome the crisis, despite had recently warned that the rescue plan approved in the U.S. “has no rhyme or reason” because they give aid “without conditions or counterparties.”

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