Yes, I know, not only has no Nobel Prize ever been revoked for anything, but they certainly do not do so for idiotic statements made by winners after they have won. However, as the first winner of the prize for international trade in 31 years, I find it appalling that Paul Krugman has come out for the "buy American" provision in the fiscal stimulus package now under consideration in the US Senate, a provision not supported by President Obama, and roundly denounced by pretty much everybody outside the US, a provision that would violate promises made in November in Washington not to engage in protectionist actions for "at least a year," with at its worst the nightmare possibility of a rerun of the trade war of the 1930s following the US Smoot-Hawley tariff that exacerbated the Great Depression. While some may dismiss such a possibility now, the standing of the US in the world on economic policy may have never been worse, given the role of the collapse of our sub-prime market in the current troubles, and with world merchandise trade dropping at an annualized rate of nearly 45% in November. This is not the time to be playing with such irresponsible fire.
I did agree that Krugman was deserving of the prize as the person who applied an innovative idea to both trade and to regional economics (aka "economic geography"), as the last winner for trade did also, Bertil Ohlin. However, I was unhappy that it was not shared, and this unhappiness appears to be spreading, with a recent posting at voxeu by Jota Ishikawa on the matter. He named a number of others, but had the two I think most deserved to share it upfront. One is Avinash Dixit, given that the model that Krugman applied is the Dixit-Stiglitz model of industrial organization. The other is Masahisa Fujita, who was the first to apply the Dixit-Stiglitz model to urban and regional economics in a not widely read journal, Regional Science and Urban Economics in 1988, three years before Krugman's paper in 1991 in the Journal of Political Economy the Nobel committee recognized (and in which Krugman failed to cite Fujita). Frankly, in this area Fujita's work has been far more innovative and of far higher intellectual quality than that of Krugman, and I also note that nobody east of India has ever received the prize.
I close by also whining again that Krugman has long gotten away with seriously misrepresenting the state of affairs in economic geography and urban and regional economics, claiming that until he came along the discussion of agglomeration was all verbal and non-rigorous. He has to this day never admitted the existence of or cited the work of such individuals as Peter Allen, Roger White, Gunter Haag, or Wolfgang Weidlich, who were doing mathematically rigorous such models, some of them with close resemblance to later work of Krugman's, thoughout the 1980s, even before Fujita's work, who is an economist. These people were even easier to ignore as they are mostly physicists with an occasional geographer thrown in (White) and published their work in such places as Environment and Planning A, Geographical Analysis, and the Journal of Regional Science, easy to ignore for a publicity hound like Krugman, and easy for a sloppy Nobel Committee to miss that clearly did not do its homework very well.