Discussion Paper Details

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Title: Putting the "New" into New Trade Theory: Paul Krugman's Nobel Memorial Prize in Economics

Author(s): J Peter Neary

Publication Date: March 2009

Keyword(s): economic geography, imperfect competition, intra-industry trade, monopolistic competition, oligopoly and trade and product differentiation

Programme Area(s): International Trade and Regional Economics

Abstract: This paper reviews the scientific contributions of Paul Krugman to the study of international trade, on the occasion of his receipt of the 2008 Nobel Memorial Prize in Economics. A simplified exposition is presented of some of his principal findings, including: the effects of trade on firm scale and product diversity in a general model of monopolistic competition; the integration of monopolistic competition with factor endowments theory; the implications of transport costs, including home-market effects and the possibility of agglomeration in models of economic geography; and the positive and normative consequences of oligopolistic trade.

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Bibliographic Reference

Neary, J. 2009. 'Putting the "New" into New Trade Theory: Paul Krugman's Nobel Memorial Prize in Economics'. London, Centre for Economic Policy Research.