Over 30 years ago, Paul Krugman ’74 and University President Richard Levin worked across the hall from each other in the Economics Department. Krugman and Levin sat opposite each other again at Tuesday — but this time, it was onstage at a town hall meeting in Sprague Memorial Hall.
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Krugman came to Yale to accept the Henry E. Howland Memorial Prize for his achievement as an economist and to participate in a town hall sponsored by the Jackson Institute for Global Affairs. A crowd of more than 300 students, faculty and New Haven residents packed the auditorium to hear Krugman discuss the grim state of the global economy.
“I’m going to commit a bit of sacrilege here,” Krugman said as he began his prepared remarks. “Martin Luther King Jr. had a dream; in my case, I had a nightmare.”
Krugman described his “nightmare” as the prospect of the United States finding itself in an economic downturn “immune to antibiotics.” Normal fiscal and monetary remedies, he said, would be useless against it. Krugman said this nightmare had come true over the past few years, as the nation faced “a complete intellectual collapse” in the face of the recession.
Additional government spending to stimulate the economy is unlikely, Krugman said, and the Federal Reserve cannot slash interest rates any further. When an audience member asked Krugman how last week’s midterm elections might impact economic recovery, Krugman was sharply critical of policymakers.
“We were probably stalled on policy anyway,” he said. “But the election guarantees that there will be no real policy response from the United States government.”
But despite Krugman’s pessimism, the event was not without moments of levity.
Krugman quipped that while New Haven seemed to have improved a lot since he taught here in the late 1970s, the Economics Department building at 28 Hillhouse Ave. was as “seedy-looking” as ever.
Recalling his time working alongside Krugman, Levin said the two used to banter about the condition of their offices. Still, Levin said he enjoyed seeing such an innovative and creative economist work and added that he was not surprised when Krugman won the Nobel Prize in 2008 for his work on international trade theory and economic geography.
Ben Polak, chair of the Economics Department, called Krugman a “huge star in economics.” Polak added that he had never met Krugman before and was excited to see him in person.
Director of the Jackson Institute James Levinsohn, who organized the event, said it was a privilege to hear Krugman’s “interesting, stimulating, if a little depressing” account of the economic crisis.
Levinsohn characterized the event as a celebration of Krugman’s time at Yale, and only accepted questions from current Yale College students. Two students who had the opportunity to ask questions, Leland Whitehouse ’14 and Yanni Legmpelos ’13, had mixed reactions to the event, though both said they were impressed by Krugman.
“It’s a scary thought that such a brilliant thinker is so pessimistic about our situation,” Whitehouse said.
Legmpelos said he thought Krugman had good ideas about economic recovery and agreed that austerity measures, such as spending cuts, cannot fix the current economic situation.
“While fiscal responsibility will go some way towards recovering from the crisis, I agree with Krugman,” he said. “We should increase government spending in infrastructure and other programs.”
The Howland Prize, named in honor of lawyer and judge Henry Elias Howland 1854, recognizes achievement in literature, fine arts, government or politics, with particular attention paid to the idealistic quality of the recipient’s work. Past winners of the Howland Prize include former British Prime Minister Tony Blair, stateswoman Indira Gandhi and composer Ralph Vaughan Williams.