What is the main contribution by Paul Krugman for understanding the concept of ‘Globalization’ ?
Answers
Answer:
Krugman was awarded the Nobel Memorial Prize in Economic Sciences (informally the Nobel Prize in Economics), the sole recipient for 2008. This prize includes an award of about $1.4 million and was given to Krugman for his work associated with New Trade Theory and the New Economic Geography.
Answer:
Paul Krugman says........................................
here was a time when everyone knew that import-substituting industrialization was the key to economic takeoff, based on loose historical ...
Explanation:
As Paul Krugman points out:
That is, to overcome 10% transport costs this assembly operation must be 38% cheaper than in the advanced country.
But this in turn means that even a seemingly small decline in transport costs could have a large effect on the location of production, because it drastically reduces the production cost advantage emerging markets need to have. And it leads to an even more disproportionate effect on the volume of trade, because it leads to a sharp increase in shipments of intermediate goods as well as final goods. That is, we get a lot of “value chain” trade.
This, I think, is what happened after 1990, partly because of containerization, partly because of trade liberalization in developing countries.