US car industry doomed, says Nobel economics laureate

Nobel economics prize winner Paul Krugman today said the troubled US auto industry will "probably disappear" as a result of the geographical forces he described in his award-winning analysis.

Krugman told reporters in Stockholm today that congress support to the auto-industry was not a long-term solution, but the result of a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."

However, he said government aid was the only possible response to the current financial crisis since the private sector would not be able to support itself.

Krugman was awarded the Nobel prize in economics for his analysis of how economies of scale can affect international trade patterns.