Here’s the announcement.  The Prize is for his “analysis of trade activity and location of economic activity.”  Tyler Cowen has a lengthy write up with lots of links and information.   The WSJ article is here.  Here’s Krugman in the NYT:

“There was something very beautiful about the old existing trade theory, and its ability to capture the world in a surprisingly simple conceptual framework,” Mr. Krugman said. “And then I realized that some of the new insights coming through in industrial organization could be applied to international trade.”

Tyler writes that “this was definitely a “real world” pick and a nod in the direction of economists who are engaged in policy analysis and writing for the broader public.”  I hope so.  That would be a good thing.  Whatever one thinks of his political commentary, Krugman’s contributions to economics place him on the list of deserving candidates though I admit that I (now obviously incorrectly) thought that current events made him less likely to win this year.  But I’m still very disappointed that Alchian and Demsetz didn’t win.  It gets worse.  I think I owe Geoff dinner again as the result of his courageous gamble to take “the field” against my pick yet again.