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STOCKHOLM, Sweden - Paul Krugman, the Princeton University scholar and New York Times columnist, won the Nobel prize in economics Monday for his analysis of how economies of scale can affect trade patterns and the location of economic activity.

AP Photo: In a March 6, 2005, file photo provided by ‘Meet the Press’, Paul Krugman of Princeton Univsersity and The New York Times, speaks during the taping of “Meet the Press.”

The Royal Swedish Academy of Sciences praised Krugman for formulating a new theory to answer questions about free trade.

STOCKHOLM - Paul Krugman of the United States won the 2008 Nobel Economics Prize on Monday for “analysis of trade patterns and location of economic activity,” the Nobel jury said.

Mr Krugman teaches economics and international affairs at Princeton University in New Jersey, and also writes a regular column for the New York Times.

Krugman, 55, has formulated a new theory that determines the effects of free trade and globalisation, as well as the driving forces behind worldwide urbanisation, the citation said. Krugman’s work on new trade theory also garnered him the John Bates Clark medal from the American Economic Association in 199 That prize is given every two years to an economist under the age of 4

I suspect discretion will overcome valor in this case. Krugman, 55, joined The New York Times in 1999 as a columnist on the Op-Ed Page and is professor of Economics and International Affairs at Princeton University.

His research showed the effects of that on trade patterns and on the location of economic activity.

The Nobel jury said Mr Krugman’s work had led to theories that could help explain the effects of free trade and globalisation and the driving force behind worldwide urbanisation.

“Krugman is not only a scientist but also an opinion maker,” economics prize committee member Tore Ellingsen said.

“The new theory of international trade has inspired an enormous field of research, which is usually a reliable indication of theoretical quality,” the Nobel committee said.

Going even further, insisting on GDP as the benchmark for recession means that the term begins to lose its meaning in an economy with severe distributional issues, as the U.S.