A grandson of immigrants
Paul Robin Krugman was born on 28 February 1953 in Albany, New York, to David and Anita Krugman, in a family of Russian Jewish origin. His maternal grandparents came to the United States from Ukraine in 1914, and his paternal grandparents from Belarus in 1920. He spent part of his early childhood in Utica, in upstate New York, and from the age of eight grew up in Merrick, a suburb on Long Island, graduating from John F. Kennedy High School in nearby Bellmore.
He has described his background as utterly conventional: a safe middle-class suburb, an ordinary education, and a lot of science fiction. That last detail turned out to matter.
From psychohistory to economics
As a teenager Krugman fell in love with Isaac Asimov’s Foundation novels, in which mathematical social scientists called psychohistorians use their understanding of society to save civilisation as a galactic empire collapses. His secret fantasy, he later wrote, was to become a psychohistorian. History fascinated him, but he wanted to understand the why as well as the what and when, and economics, with its small models that show how plausible assumptions lead to surprising conclusions, seemed the nearest thing available.
At Yale he majored in economics while taking many history courses. A term paper in 1973 on the price of gasoline, written for a seminar taught by William Nordhaus and Tjalling Koopmans, led Nordhaus to hire him as a research assistant. He graduated summa cum laude in 1974 and went to the Massachusetts Institute of Technology, where he was shaped by his adviser Rudi Dornbusch and by what he called the MIT style: simple models applied to real problems. In the summer of 1976 he worked for three months with a team of MIT students at the central bank of Portugal, then in turmoil after its revolution. He completed his PhD in 1977.
Why similar countries trade
Traditional trade theory, going back to David Ricardo, explained trade by differences between countries: one nation is better at growing wine, another at making cloth. But by the late twentieth century most world trade was between similar rich countries exchanging similar goods, Germany selling cars to Sweden while Sweden sold cars to Germany. In 1978, as a young assistant professor at Yale, Krugman showed Dornbusch an idea for a trade model with economies of scale and monopolistic competition. He later recalled that he knew within hours that he had the key to his whole career.
His 1979 paper in the Journal of International Economics rested on two simple assumptions: that consumers like variety, and that production is cheaper at large scale. Together they explain why each brand of car is built in a few big factories in one or two countries but sold everywhere, and why similar countries gain from trading with each other. This approach, which became known as the new trade theory, transformed the field. The same year he published an influential model of currency crises, showing that an unsustainable fixed exchange rate tends to end not gradually but in a sudden speculative attack.
The new economic geography
Krugman then asked where production happens within countries. In his 1991 paper “Increasing Returns and Economic Geography” published in the Journal of Political Economy, he showed how economies of scale, transport costs and the size of local markets can feed on each other: manufacturers gather where demand is large, which attracts more workers and consumers, which attracts more manufacturers. The result is a world divided into dense, prosperous centres and less developed peripheries, a pattern visible in everything from the rise of great cities to regional inequality. He called the paper the love of his academic life, and it became his most cited work.
In October 2008 the Royal Swedish Academy of Sciences awarded him, as sole laureate, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his analysis of trade patterns and the location of economic activity. In the committee’s words, by integrating economies of scale into explicit general equilibrium models he had deepened our understanding of the determinants of trade and the location of economic activity. He had already received the American Economic Association’s John Bates Clark Medal in 1991.
A career across institutions
After teaching at Yale from 1977, Krugman joined MIT in 1979. In 1982–83 he spent a year in Washington as senior international economist on Ronald Reagan’s Council of Economic Advisers under Martin Feldstein, strange, he later admitted, for an unabashed defender of the welfare state, which he called the most decent social arrangement yet devised. He returned to MIT as a full professor in 1984, and also taught at Stanford and the London School of Economics.
He moved to Princeton in 2000 and stayed until 2015, when he joined the Graduate Center of the City University of New York as Distinguished Professor of Economics. His textbook International Economics, written with Maurice Obstfeld, became a standard in universities worldwide, and he has written introductory economics textbooks with his wife, the economist Robin Wells.
The public economist
From the 1990s Krugman increasingly wrote for general readers, in books such as The Age of Diminished Expectations (1990) and Pop Internationalism, and in columns for Fortune and Slate, where he attacked fallacies on both left and right, from protectionism to supply-side economics. In 1999 The New York Times invited him to write a twice-weekly column; it began in January 2000 and ran for a quarter of a century.
His columns made him one of the most influential and polarising commentators in the United States. He was a fierce critic of George W. Bush’s tax cuts and of the Iraq war. During the 2008 financial crisis and the Great Recession he became the leading public voice of a Keynesian revival, arguing that the Obama stimulus was too small and that austerity in Europe and America would prolong unemployment, themes of his books The Return of Depression Economics (2008) and End This Depression Now! (2012). Earlier work on Japan’s 1990s slump had helped revive economists’ interest in the “liquidity trap” in which central banks cannot cut interest rates further. His blog was called The Conscience of a Liberal, after his 2007 book.
Some of his interventions had concrete consequences abroad. A 1994 Foreign Affairs essay, “The Myth of Asia’s Miracle” argued that East Asia’s rapid growth came mainly from mobilising more capital and labour rather than from rising productivity, and would slow, a view that angered many Asian governments. During the 1997–98 Asian financial crisis he suggested emergency currency controls, which Malaysia adopted. And in 2016 his mocking phrase “leprechaun economics” coined after Ireland reported 26 per cent GDP growth, helped prompt Ireland’s central bank to introduce a new measure of national income that strips out the distortions caused by multinational accounting.
Praise, criticism and mistakes
The Financial Times columnist Martin Wolf called him both the most hated and the most admired columnist in the US. Critics, including The Economist in 2003 and the Times’s own ombudsman Daniel Okrent, accused him of partisanship and of using numbers selectively. He has also been wrong in public. A 1998 prediction that by around 2005 the internet’s economic impact would prove no greater than the fax machine’s is endlessly quoted against him; he later said it was meant to be fun and provocative. On election night in 2016 he wrote that markets might never recover under Donald Trump, and retracted it three days later.
He has also been willing to change his mind. In the 2010s he acknowledged that the models economists had used in the 1990s underestimated the damage globalisation did to some workers and communities in rich countries, while still defending trade as beneficial overall; and he revised his earlier view that low-skilled immigration significantly depresses native wages.
Jewish background and views on Israel
Krugman has written little about his own Jewish identity. His family story is that of the great migration of Eastern European Jews to America in the early twentieth century: grandparents who left Ukraine and Belarus on the eve of and just after the First World War, and grandchildren who, within two generations, reached the summit of American academic life. He is counted among the many Jewish laureates of the economics prize.
On Israel he has written as a liberal critic. In 2012 he praised Peter Beinart’s The Crisis of Zionism as a brave book and criticised the policies of Benjamin Netanyahu’s government, and in 2024, during the Gaza war, he wrote that Netanyahu’s government was killing huge numbers of civilians.
Later years and legacy
In December 2024 Krugman retired as a Times columnist; his final column, “Finding Hope in an Age of Resentment” appeared on 9 December 2024. He said that his editors had increasingly pressed him to tone down his voice. He moved to a daily Substack newsletter, edited by Robin Wells, which by mid-2025 was reaching hundreds of thousands of readers per post.
His academic legacy is secure: the new trade theory and the new economic geography are now standard parts of economics, and his clear, model-driven style has influenced a generation of economists. His public legacy is more contested, but few economists have done as much to explain economic ideas to a mass audience. As the economist J. Peter Neary put it, he has probably done more than any other writer to explain economic principles to a wide audience.
Sources & further reading
Paul Krugman, Wikipedia · Paul Krugman, Biographical, NobelPrize.org · Paul Krugman, “Incidents from My Career”, MIT · Paul Krugman, Jewish Virtual Library · Paul Krugman (newsletter), About · Researched from the sources above and checked against them. Spotted an error? Tell us.
A life of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.