Read Sam Coates's comments on the award in his Westminster blog, The Red Box

An American academic was named as winner of the Nobel Prize for Economics today only hours after publishing a column in The New York Times suggesting that Gordon Brown may have singlehandedly saved the world financial system.

Paul Krugman, a professor at Princeton University and columnist for the NYT, won the award for his analysis of international trade and economic geography. He is equally well known for his frequent columns in the newspaper analysing the global financial crisis. In today's edition he writes in praise of the British response to the crisis;

"The Brown Government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. And this combination of clarity and decisiveness hasn’t been matched by any other Western government, least of all our own," he writes" The Government "went straight to the heart of the problem — and moved to address it with stunning speed".

It was an apt day for Mr Krugman, a strong critic of the Bush Administration, to win the award: a day in which governments around the world scrambled to prevent a collapse in the global financial system.

Only on Friday, Mr Krugman wrote: "The time to act is now. You may think that things can’t get any worse — but they can, and if nothing is done in the next few days, they will." Gordon Brown and the UK Government, he wrote today, had led the global response to the crisis, with other government's simply playing "catch up".

Krugman is currently Professor of Economics and International Affairs at Princeton University. He received his BA from Yale University in 1974 and his PhD from Massachusetts Institute of Technology (MIT) in 1977. He has taught at Yale, MIT and Stanford, becoming the Ford International Professor of Economics at MIT.

The Royal Swedish Academy of Sciences today praised him for formulating a new theory to answer questions about free trade. "What are the effects of free trade and globalisation? What are the driving forces behind worldwide urbanisation? Paul Krugman has formulated a new theory to answer these questions," the Nobel Foundation wrote about his decision to give him the reward.

Today, leaders and finance ministers are dealing with globalisation of a different sort; "A crisis that began with a bubble in Florida condos and California McMansions has caused monetary catastrophe in Iceland. We’re all in this together" he wrote last week.

Speaking after the announcement of his award, Mr Krugman gave his verdict on current efforts to stem the global financial meltdown, saying: "I'm slightly less terrified today than I was on Friday."

"We are now witnessing a crisis that is as severe as the crisis that hit Asia in the Nineties. This crisis bears some resemblance to the Great Depression," he said.

The award, known as the Nobel Memorial Prize in Economic Sciences, is the last of the six Nobel prizes to be announced this year and is not one of the original Nobels. It was created in 1968 by the Swedish central bank in memory of Alfred Nobel, the Swedish chemist.

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