Dear Editor,
Many may wish to congratulate Paul Krugman on winning the prestigious Nobel Prize in Economics. Mr. Krugman, currently a professor in Economics at the Princeton University in New Jersey and also an Op-Ed page columnist of the New York Times was cited for “his analysis on trade patterns and location of economic activity” by the Royal Swedish Academy in granting the award. I followed Professor Krugman’s work closely because of my research interest on the nexus between “Trade and Exchange Rate especially in small open economies”. While pursuing a research topic at Graduate school, University of Glasgow on the topic “Did the WTO Contribute to Increases in International Trade”, I found both Professor Krugman’s book on International Trade and his research papers on NBEER thought provoking.
Professor Krugman was one of the early intellectual thinkers to develop the first generation model on exchange rate and financial crisis, a crisis that he attributed solely to weak economic fundamentals. This model was however overtaken by two other models, the multiple equilibria model and later the twin crisis model- currency and financial crises, that was used to explain the popular Asian Crisis in 1998.
Interestingly, the current financial crisis in the US that brought the world financial system to its knees displayed elements of all three models. The current financial crisis will definitely be a hot subject for further empirical research in the future.
I have no doubt that the Nobel Prize is in the hands of one who has contributed in no small measure at both the theoretical and empirical level in economic thought,
Finally, I found Professor Krugman’s columns in the New York Times on the Doha Development Round impasse at the W.T.O and the failure to move forward quiet balanced.
Yours faithfully,
Rajendra Rampersaud
