"It will do so because of the geographical forces that me and my colleagues have discussed," the Princeton University professor and New York Times columnist told reporters in Stockholm. "It is no longer sustained by the current economy."
Krugman won the 10 million kronor (US$1.4 million) Nobel Memorial Prize in economics for his work on international trade patterns. Some of his research on economic geography seeks to explain why production resources are concentrated in certain locations.
On his blog, Krugman clarifies that he means the Detroit auto industry will disappear -- it will be just fine in other partys of the country.
Krugman's remarks were not off-the-cuff, but come from his presentation that discusses economic geography - here are two of his slides (links from Krugman's blog and Marginal Revolution):
Over at tdaxp, I note Krugman's argument that higher oil prices can decrease oil supply, as well as Krugman's call for public investment.