Nobel Prize winner gives insight on recession

Kendall Hall filled with students and many were turned away when Nobel Prize winner and Princeton professor Paul Krugman visited the College on Wednesday, Oct. 23. The economist and New York Times writer gave a presentation regarding the U.S. Government’s involvement in the Great Recession and the current recovery,  “Are we Greece?”

“This event was a telling sign of TCNJ’s ever-growing academic reputation and it was inspiring to see Kendall Hall filled to capacity,” senior economics major Chris Attardo said.

His lecture began with a joke.

“I have to apologize. It did not seem right to wear a tie to an event that is only 20 minutes from my house,” he said. Krugman maintained this casual and sometimes comedic disposition throughout the entire lecture.

During the lecture, Krugman outlined of the problem the Federal Bank faced when it began to lower interest rates in an effort to stimulate economic growth during the recession following the 2008 stock market crash.

“They ran into a big problem that can be summarized in one word: zero,” Krugman said. He was referring to the lower zero bound problem, or that interest rates could not be lowered any further because they were already too close to zero in 2008.

Krugman proceeded to compare and contrast the Great Recession to various periods in U.S. economic history as well as economic crises in Europe and Japan. He stated that Japan had handled its crisis in the late 1990s better than the United States had handled and is currently handling the Great Recession.

“The Japanese government purposely created the crisis we fear the most,” Krugman said. Japan is experiencing growth because its government set a goal for higher inflation in an effort to increase trade, he explained.

His only positive comment about the U.S. government’s handling of the Great Recession was that “it’s not as bad as the Great Depression.”

Krugman jokingly suggested the observation as a potential campaign slogan for the Obama administration.

Despite the complexity of the presentation, Krugman was able to break down each economic factor and topic in a simple manner so he could reach the diverse student audience. He used the same accessibility he often employs in his articles for the New York Times.

“I think it’s important for students of different disciplines to be exposed to experts in fields aside from their own area of study,” sophomore biology major Asmi Panigrahi said.

Following the lecture, the floor was opened up to any questions the audience had about Krugman’s writings or the lecture. Questions ranged from the impact of technology on our economy to more abstract concepts such as whether economics is a science.

Krugman answered students’ questions in detail. When the presentation had to end, there were still students in line to ask the economist questions.

“Having Mr. Krugman speak at the College was truly a unique experience and a great privilege,” Attardo said.