Stockholm: US economist Paul Krugman, a fierce critic of the Bush administration for policies that he argues led to the current financial crisis, won the 2008 Nobel prize for economics on Monday.
The Nobel committee said the award was for Krugman's work that helps explain why some countries dominate international trade, starting with research published nearly 30 years ago.
A well-known economist who writes columns for the New York Times, Krugman has long featured among the favourites to win a Nobel. He is a professor of economics and international affairs at Princeton University in the United States.
Krugman, speaking by telephone to a news conference, was caught on the hop by the news. "I rushed to take a shower so that I could take part in the press conference. I called my wife and I called my parents. I've not yet managed to get myself a cup of coffee," he said.
But lack of caffeine did not stop him offering an ad hoc diagnosis of how the world economy was faring. "We are now witnessing a crisis that is as severe as the crisis that hit Asia in the 90's. This crisis bears some resemblance to the Great Depression."
Praising world leaders' efforts to staunch the financial bleeding, he added: "I'm slightly less terrified today than I was on Friday."
World policy makers met at the weekend, after a black Friday on financial markets, to agree radical measures to rescue banks, revive liquidity and tackle the risk of a global recession.
The prize committee dismissed any suggestion its choice was influenced by the current crisis or political considerations. "I don't think the committee has ever taken a political stance," committee secretary Peter Englund told Reuters.
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"The real, dramatic crisis is an event of the last month or so, which is in practice after the committee took its decision." Englund said Krugman was more than a great economist. "Not only is he a stellar researcher ... but also he is an excellent expositor and that is clear both from textbooks but also, as many of you know, from his columns."
Krugman's latest column in the New York Times, published on Monday, praised Britain for thinking clearly and acting quickly to address the crisis, unlike the United States. He mused: Did British leader Gordon Brown just save world markets? Britain unveiled a plan last week to bolster ailing banks and on Monday it waded in with £ 37 billion ($64 billion) of capital, a move that could make the state their main owner.
TAKING BUSH TO TASK
Krugman has been heavily critical of US President George W Bush's administration, arguing its zeal for deregulation and loose fiscal policies helped spark the current banking meltdown.
The Royal Swedish Academy of Sciences said the prestigious 10 million crown ($1.4 million) award recognised Krugman's formulation of a new theory that addresses what drives worldwide urbanisation.
"He has thereby integrated the previously disparate research fields of international trade and economic geography," the committee said. "Krugman's approach is based on the premise that many goods and services can be produced more cheaply in a long series, a concept generally known as economies of scale," it said.
Krugman's theory clarifies why trade is dominated by countries that not only have similar conditions but also trade in similar products.
The committee cited Sweden as an example as it both exports and imports cars.
Born in New York City in 1953, Krugman received a PhD at the Massachusetts Institute of Technology (MIT). He has taught at Princeton since 2000. As well as writing for the New York Times Krugman is the author of 20 books and more than 200 papers.
He has taught at Yale, MIT and Stanford University. His current work centres on economic and currency crises.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in the late 1960s and is not part of the original group of awards set out in Alfred Nobel's 1895 will.
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