The Nobel prize in economics was awarded to Paul Krugman, a Princeton University scholar whose groundbreaking study on trade is less known to the public than his withering assessment of the Bush administration.

In announcing the award Monday, the Royal Swedish Academy of Sciences cited Mr. Krugman's work analyzing trade patterns and how areas of specialization arise in different regions.

As a columnist and blogger for the New York Times, Mr. Krugman, 55 years old, has taken the Bush administration to task over its waging of the Iraq war and, more recently, its handling of the financial-system bailout. Mr. Krugman also has faulted Republican presidential candidate John McCain, writing earlier this month in his column, "the McCain plan would do for health care what deregulation has done for banking. And I'm terrified."

Coming three weeks before the U.S. presidential election, the news sparked criticism that political considerations as well as academic achievements influenced the committee's decision.

Many academic economists said it has always been a question of when Mr. Krugman would win a Nobel rather than if he would win it.

"Paul has in some sense had at least two distinct careers - one as a stellar and inventive academic economist and researcher and another as a journalist and political commentator," said National Bureau of Economic Research president and Massachusetts Institute of Technology economist James Poterba. "This prize was awarded for the path breaking insights that emerged from his academic research."

Gregory Mankiw, former chairman of the Council Economic Advisors under President George W. Bush and now an economist at Harvard University said, "I see no evidence that the Nobel committee in economics has been politicized at all. It's been very evenhanded."

For centuries, the economic view on trade was that countries export items that they have a comparative advantage in producing, and import items that they don't. As put forth by English economist David Ricardo in 1817, if in Portugal it takes less labor to produce wine than to produce cloth, and in England the opposite is true, Portugal will export wine to England and import cloth-and it will do this even if it can produce cloth in with less labor than England can.

But in the modern world, trade hasn't been demarcated on the lines of specialization that Ricardo's theory suggests it should. Rather, a handful of countries dominate trade and in many cases both import and export similar goods. Starting in the 1970s, Mr. Krugman was among a number of economists, including Harvard University's Elhanan Helpman and Princeton's Avinash Dixit, who tried to find out why.

"Paul was the undisputed leader of the group," Mr. Dixit said. "He can take quite complex questions and reduce them to the simple essential insight."

In 1979, Mr. Krugman suggested a theory of trade that incorporated consumers' desire for diversity in the different kinds of things they buy. Some Americans will want European-made BMW motorcycles, for example, while some Europeans will want American-made Harley Davidsons, and so the U.S. will both import and export motorcycles. Both BMW and Harley Davidson will then be able to take advantage of economies of scale in building their brand of motorcycle, lowering their costs so that consumers in both Europe and America will enjoy many choices at a lower cost.

Mr. Krugman applied his insights on trade and economies of scale to regional economics, considering how firms face tradeoffs between concentrating in specific locations and high transport costs. His work has helped give rise to new interest in the economics of agglomeration, which studies where people and industries locate, and why.

The prize, known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, comes with a purse of 10 million Swedish kronor, or about $1.4 million.

Write to Justin Lahart at justin.lahart@wsj.com