Economics, Nobel Prize in

Economics, Nobel Prize in

BIBLIOGRAPHY

The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, the founder of the Nobel Prize, was instituted by the Bank of Sweden (the world’s oldest central bank) for its three-hundredth anniversary in 1968, sixty-seven years after the first Nobel Prizes were awarded for other fields. Known also as the Nobel Memorial Prize in Economics, and less formally as the Nobel Prize in Economics, it is the only prize granted that was not specified in Alfred Nobel’s will. Its addition was justified as a recognition that the use of quantitative methods had made economics a science like physics and chemistry.

The Nobel Prize in Economics is awarded each year for outstanding intellectual contributions to the field of economics. The laureates are chosen by the Royal Swedish Academy of Sciences, from nominations of about one hundred living persons made by qualified nominators each year. Prizewinners receive their award during a ceremony in Stockholm, together with the laureates in the other fields. No more than three people can share the prize for a given year. The names of the nominees can only be published after fifty years.

From 1969, when the first prize was awarded, up to 2006, fifty-eight people have received the Nobel in economics. Economics is the only discipline in which no woman has ever been awarded a Nobel. The United States has dominated the award, with forty laureates, followed by nine laureates from the United Kingdom. The University of Chicago has employed the highest number of laureates in economics, nine up to 2006, followed by Harvard University and U.C. Berkeley, with four laureates each. Out of the thirty-eight prizes awarded up to 2006, seventeen were shared. With an average age of sixty-six at the time of the award, laureates in economics are the oldest to receive the prize—the youngest are in physics, with an average age of fifty-four. The youngest person to receive the prize in economics was Kenneth Arrow, in 1972, at the age of fifty-one; the oldest was Thomas Schelling, in 2005, at the age of eighty-four.

The prize has been awarded to work ranging from theory to empirical application, from macroeconomics to microeconomics, from economic policy to economic history, and from mathematical modeling to psychology. The early awards were focused on acknowledging the past contributions of “giants” such as Paul Samuelson (1970), the father of the modern economic theory; Simon Kuznets (1971), the father of the empirical analysis of economic growth; John Hicks and Kenneth Arrow (1972), pioneering contributors to general economic equilibrium theory and welfare theory; Wassily Leontief (1973), who developed the input-output method and a number of applications to economic problems; and Milton Friedman (1976), whose long list of contributions include consumption analysis, monetary history and theory, and stabilization policy.

The scope of the award has been broadened over the decades, while the work awarded has become more specialized. One could already see these trends in the 1980s, with prizes given for work on the theory of economic growth (Robert Solow, 1987), financial economics (James Tobin, 1981; Franco Modigliani, 1985; Harry Markowitz, Merton Miller, and William Sharpe, 1990), empirical work and econometrics (Lawrence Klein, 1980; Richard Stone, 1984; Trygve Haavelmo, 1989), and economic

Nobel Laureates in Economics, 1969-2006
Ragnar Frisch, Jan Tinbergen	1969
Paul A. Samuelson	1970
Simon Kuznets	1971
John R. Hicks, Kenneth J. Arrow	1972
Wassily Leontief	1973
Gunnar Myrdal, Friedrich August von Hayek	1974
Leonid Vitaliyevich Kantorovich, Tjalling C. Koopmans	1975
Milton Friedman	1976
Bertil Ohlin, James E. Meade	1977
Herbert A. Simon	1978
Theodore W. Schultz, Sir Arthur Lewis	1979
Lawrence R. Klein	1980
James Tobin	1981
George J. Stigler	1982
Gerard Debreu	1983
Richard Stone	1984
Franco Modigliani	1985
James M. Buchanan Jr.	1986
Robert M. Solow	1987
Maurice Allais	1988
Trygve Haavelmo	1989
Harry M. Markowitz, Merton H. Miller, William F. Sharpe	1990
Ronald H. Coase	1991
Gary S. Becker	1992
Robert W. Fogel, Douglass C. North	1993
John C. Harsanyi, John F. Nash Jr., Reinhard Selten	1994
Robert E. Lucas Jr.	1995
James A. Mirrlees, William Vickrey	1996
Robert C. Merton, Myron S. Scholes	1997
Amartya Sen	1998
Robert A. Mundell	1999
James J. Heckman, Daniel L. McFadden	2000
George A. Akerlof, A. Michael Spence, Joseph E. Stiglitz	2001
Daniel Kahneman, Vernon L. Smith	2002
Robert F. Engle III, Clive W. J. Granger	2003
Finn E. Kydland, Edward C. Prescott	2004
Robert J. Aumann, Thomas C. Schelling	2005
Edmund S. Phelps	2006

theory (George Stigler, 1982; Gerard Debreu, 1983; James Buchanan, 1986; Maurice Allais, 1988).

These trends have become even more apparent in recent years. Since 1990, the prize has been awarded for contributions that address economic problems with tools and results from fields outside economics, such as mathematics and game theory (John Harsanyi, John Nash and Reinhard Selten, 1994; Robert J. Aumann and Thomas Schelling, 2005), psychology (Daniel Kahneman and Vernon Smith, 2002), and philosophy (Amartya Sen, 1998). It has also been given for contributions that apply economic tools to other fields, such as work that uses microeconomic analysis to explain a wide range of human behavior and interaction (Gary Becker, 1992), and work using economic theory and quantitative methods to explain economic and institutional change in history (Robert Fogel and Douglass North, 1993). It has been awarded for econometrics (James Heckman and Daniel McFadden, 2000; Robert Engle and Clive Granger, 2003), and for broadening and deepening economic theory by incorporating transaction costs and property rights (Ronald Coase, 1991), rational expectations (Robert Lucas, 1995), and asymmetric information (George Akerlof, Michael Spence, and Joseph Stiglitz, 2001). It has also been given for work with direct policy implications, such as that addressing monetary and fiscal policy under different exchange rate regimes (Robert Mundell, 1999) and the intertemporal trade-offs in macroeconomic policy (Phelps 2006), and for contributions that were first criticized as too specialized and limited in scope, but later proved more influential and applicable than most had expected, such as the pricing formula for financial derivatives (Robert Merton and Myron Scholes, 1997).

The Nobel Prize in Economics has been a source of controversy since its introduction. Some have even suggested that the award should be discontinued. Its very name has been questioned, as it was not part of Alfred Nobel’s bequest. It has also been argued that the criteria for an award for a social science cannot be as objective as for the other fields, although similar concerns have been raised for the prizes for peace and literature. Indeed, this may explain why it takes much longer to receive the Nobel in Economics after a contribution is made than in any other field—an average of thirty-three years, compared with an average of twelve years for prizes in the hard sciences—which has also been a source of controversy. Finally, some of the recent selections have been criticized for honoring contributions that are too narrowly focused.

The prize has affected both the field of economics itself and the field’s impact. It has been argued that the prospect of receiving a Nobel Prize motivates economists to pursue original research ideas. Although there has been no empirical study documenting such an effect, it is consistent with one of the most basic laws in economics that people respond to incentives. The impact that an economist can have on the literature, on economic policy, and on public opinion is substantially enhanced if they can add the title Nobel Laureate after their name. Elite universities lose no opportunity to advertise the laureates on their faculty to attract new faculty members and graduate students. Even Hollywood has been inspired by the prestige of the prize, as reflected in the Oscar-winning movie A Beautiful Mind, about the life of John Nash.

SEE ALSO Economics

BIBLIOGRAPHY

Baffes, John, and Athanasios Vamvakidis. Are You Old Enough for a Nobel Prize? Washington, DC: World Bank and International Monetary Fund. (Forthcoming).

Feldman, Burton. 2000. The Nobel Prize: A History of Genius, Controversy, and Prestige. New York: Arcade.

Jones, Benjamin F. 2005. Age and Great Invention. NBER Working Paper 11359. Cambridge, MA: National Bureau of Economic Research.

Nasar, Sylvia. 1998. A Beautiful Mind: A Biography of John Forbes Nash, Jr., Winner of the Nobel Prize in Economics, 1994. New York: Touchstone. Reissued as A Beautiful Mind: The Life of Mathematical Genius and Nobel Laureate John Nash. New York: Touchstone, 2001.

Nobel Prize Internet Archive. http://www.almaz.com/nobel/.

Nobelprize.org. http://nobelprize.org/index.html.

Shalev, Baruch A. 2002. One Hundred Years of Nobel Prizes. Los Angeles: Americas Group.

Weinberg, Bruce A., and David W. Galenson. 2005. Creative Careers: The Life Cycles of Nobel Laureates in Economics. NBER Working Paper 11799. Cambridge, MA: National Bureau of Economic Research.

Athanasios Vamvakidis