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DP7231 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 , product differentiation
JEL(s): F12
Programme Areas: International Trade and Regional Economics
Link to this Page: www.cepr.org/pubs/dps/DP7231.asp


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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