Three Americans have received this year's Nobel Prize in Economics. One half went to David Card (University of California, Berkeley) "for his empirical contributions to labour economics," and the other half was awarded jointly to Joshua D. Angrist (Massachusetts Institute of Technology) and Guido W. Imbens (Stanford University) "for their methodological contributions to the analysis of causal relationships."
Two Americans, Dr. Paul R. Milgrom and Dr. Robert B. Wilson of Stanford University, received this year's Nobel Prize in Economics "for improvements to auction theory and inventions of new auction formats." Each year, the Royal Swedish Academy of Sciences awards the Prize in recognition of ideas and research that increase our understanding of important issues in economics and related areas. This year's winners have studied auctions and how they work.
Often, the Nobel Prize in Chemistry involves advances that, while important, are difficult to comprehend for mere mortals (it took my late friend Rick Smalley many attempts before I came to somewhat grasp the mysteries of nanotechnology that led to his Prize in the 1990s). This year is different. The discoveries enabled by the three scientists who won this year affect technologies we hold very near and dear and use daily (many of you even as you read this column).
Poverty affects hundreds of millions of people around the globe despite centuries of efforts to alleviate it by myriad individuals, organizations, and programs. A primary issue is the complexity of the problem. A trio of Americans helped to implement and demonstrate a novel approach and have received this year's Nobel Prize in Economics (or, more formally, The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) for "their experimental approach to alleviating global poverty." The recipients are Abhijit Banerjee and Esther Duflo, both professors at the Massachusetts Institute of Technology, and Michael Kremer of Harvard University.
"For his contributions to behavioral economics," Richard H. Thaler has been awarded this year's Nobel Prize in Economics (or, more formally, "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2017"). Every year, the Nobel Prize is awarded to someone whose ideas and research have increased our understanding of important issues in economics and related areas, and Dr. Thaler certainly meets and exceeds these criteria. In fact, many of us felt he should have shared the prize with Dan Kahneman back in 2002 because of the similarity and importance of their work.
Economic theory can admittedly be simultaneously boring and incomprehensible at times, but is critical to our understanding of the functioning of markets, businesses, and consumers. Its concepts inform the structure and actions of governments and central banks, improve policies and social services, and enhance job markets. From the most rudimentary barter systems of trade centuries ago to the complex, multifaceted transactions common in the world today, economic concepts are essential to social progress and opportunity.
Every year, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (more commonly known as the Nobel Prize in Economics) is awarded to an individual or individuals whose ideas and research have increased our understanding of important issues in economics and related areas. This year's recipients, Oliver Hart of Harvard University and Bengt Holmstrom of Massachusetts Institute of Technology, were awarded the prize for their contributions to contract theory.