Have you read the reviews on Krugman's new book yet? [ Ссылка ]
Economists have a method, and Paul Krugman's method is to be a fanatical simplifier. You have to be a really good economist to be so simple.
Krugman lives with his wife in New Jersey, and he was recently awarded the Nobel Prize for a series of bold ideas that have changed the way the economists have viewed the world. He published his New Trade Theory in 1979. Prior to that, all the theories had to do with the idea of comparative advantage. But it didn't understand why there was so much trade between countries that were similar and lacked a comparative advantage. Paul Krugman finally provided an answer to that.
The answer had to do with the economy of scale. If you can produce twice as much of something, it doesn't necessarily cost twice as much. What people really want is variety and choice. That is why there are so many varieties of cookies in the grocery aisle.
Krugman would think about real world problems and then figure out why the traditional theories wouldn't work. Economic geography helps explain why people gather in different places. Why are 60 million people crammed into an area of the east coast? It isn't because the scenery there is beautiful. It is because that is where all the other people are. It may seem obvious and common sense, but few people have common sense, and that is why he was awarded the Nobel Prize. When he got the news, he was stark naked and he thought that it was a practical joke.
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