For economists, who often disagree with one another and get their forecasts wrong, the Nobel Prize in Economics remains controversial after 75 years.
This year’s winner of the prize is to be announced tomorrow at a ceremony in Stockholm that wraps up this year’s Nobel season.
However, is it a “real” Nobel prize, or merely an event seeking to profit from the venerable Swedish brand?
Each year, critics note that Alfred Nobel, the Swedish philanthropist and scientist who founded the other awards, never had the idea to reward economists.
The economics prize was created in 1968 to celebrate the 300th anniversary of the Swedish central bank, and the first laureate was named a year later.
Unlike the medicine, physics, and chemistry prizes announced the week before, “economics is not an experimental science,” Economic Sciences Prize Committee former head Peter Englund wrote on the Nobel Foundation’s Web site.
Others said economics can indeed be experimental.
In 2002, the prize went to the US’ Vernon Smith, who got his students to set up small markets for establishing “laboratory experiments as a tool in empirical economic analysis.”
This year the jury might choose to honor someone who has combined a research career with the harsh reality of the financial crisis: Former IMF chief economist Olivier Blanchard, or former US Federal Reserve chairman Ben Bernanke.
Still, the favorites are a host of decidedly more low-key professors at US universities such as Indian-born Avinash Dixit of Princeton, US economist Robert Barro of Harvard University and Finland’s Bengt Holmstrom at the Massachusetts Institute of Technology.
The diversity of the potential candidates reflects profound differences within the field.
Economics largely lacks the universal “laws” other disciplines are built on. For example, the notion that consumers are rational — which is the basis of a lot of research — was dismissed by 2013 laureate Robert Shiller.
The diversity is an asset, Scotland’s University of Stirling economics professor Sheila Dow said.
“It is better to have a range of approaches to draw on ... to address new economic problems,” she said.
She appreciated the “plurality,” she said, adding that “economics can be a mature social science and yet not aspire to establish universal laws or general agreement.”
However, the very same thing is criticized by some of her peers.
They say that honoring the best researchers puts too much emphasis on abstract, intellectual models that are far removed from the daily workings of the economy.
“The trouble with the Nobel award is not so much its choice of man ... but its designation of economics as a scientific field worthy of receiving a Nobel prize,” US economics professor Michael Hudson wrote in 1970.
The concept is “still as bad” 45 years later, he said.
“It is basically public relations for Chicago-type free-market theory,” Hudson told reporters, referring to the school of thought that originated at the University of Chicago in the 1940s and which has often been honored by the Nobel committee.
The discipline carries more weight than it did in the 1960s and the 1970s for a number of reasons.
Mathematical models have become more refined, economics departments have grown in size and economists have become an important voice in public debate, even though their audience is sometimes skeptical.
Members of the public often point out that economists have been unreliable in predicting financial crises and economic downturns, and that so far a remedy against mass unemployment remains elusive.
In addition, winners like last year’s laureate, France’s Jean Tirole, prefer their academic life to public engagement.
“I have chosen not to [go] because I prefer to stay in my laboratory,” he told France Info radio, referring to his office.
SEEKING CHANGE: A hospital worker said she did not vote in previous elections, but ‘now I can see that maybe my vote can change the system and the country’ Voting closed yesterday across the Solomon Islands in the south Pacific nation’s first general election since the government switched diplomatic allegiance from Taiwan to Beijing and struck a secret security pact that has raised fears of the Chinese navy gaining a foothold in the region. The Solomon Islands’ closer relationship with China and a troubled domestic economy weighed on voters’ minds as they cast their ballots. As many as 420,000 registered voters had their say across 50 national seats. For the first time, the national vote also coincided with elections for eight of the 10 local governments. Esther Maeluma cast her vote in the
Nearly half of China’s major cities are suffering “moderate to severe” levels of subsidence, putting millions of people at risk of flooding, especially as sea levels rise, according to a study of nationwide satellite data released yesterday. The authors of the paper, published by the journal Science, found that 45 percent of China’s urban land was sinking faster than 3mm per year, with 16 percent at more than 10mm per year, driven not only by declining water tables, but also the sheer weight of the built environment. With China’s urban population already in excess of 900 million people, “even a small portion
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
HYPOCRISY? The Chinese Ministry of Foreign Affairs yesterday asked whether Biden was talking about China or the US when he used the word ‘xenophobic’ US President Joe Biden on Wednesday called for a hike in steel tariffs on China, accusing Beijing of cheating as he spoke at a campaign event in Pennsylvania. Biden accused China of xenophobia, too, in a speech to union members in Pittsburgh. “They’re not competing, they’re cheating. They’re cheating and we’ve seen the damage here in America,” Biden said. Chinese steel companies “don’t need to worry about making a profit because the Chinese government is subsidizing them so heavily,” he said. Biden said he had called for the US Trade Representative to triple the tariff rates for Chinese steel and aluminum if Beijing was