Actually, I believe it was awarded because of Krugman’s work on international business siting decisions. Presumably he actually knows something about that corner of (micro-)economics and his views on it, unlike his views on macroeconomic policy, would be worth listening to. He’s analogous to a biologist with no training in ecology beyond a first year graduate course who has done groundbreaking work in cell biology pontificating about environmental issues, or a Ph.D. in solid-state physics going on about cosmology.
Thanks for that TRD. They had to base it in something and that makes good sense. His anti-Bush columns may have endeared him to some of the committee.