Nobel Prize awarded for economic geography

October 13, 2008

Having been an academic geographer (student) for a brief period of time, it is very interesting to see a Nobel Prize being awarded in the study of economic geography. Technically, the award is not a ‘Nobel Prize’ along the lines of chemistry, physics, etc. but is the “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” Whatever. 

Patterns of trade and location have always been key issues in the economic debate. What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions. He has thereby integrated the previously disparate research fields of international trade and economic geography.

Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale. Meanwhile, consumers demand a varied supply of goods. As a result, small-scale production for a local market is replaced by large-scale production for the world market, where firms with similar products compete with one another.

Not much time to really comment.. except that he has been given credit for making economic geography worth a darn in recent times.  This is a good readable overview of the meaning of his work.

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