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Nobel Prize in Economics: Winners & Contributions

Instructor: Christopher Muscato

Chris has a master's degree in history and teaches at the University of Northern Colorado.

The Nobel Prize is an incredibly prestigious award. In this lesson, we're going to look at recipients in the field of economics, and explore the influence their work has had on the world.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel

When Swedish engineer Alfred Nobel died in 1896, he left a pretty hefty sum of money in his will to award prizes to those who achieved something amazing in the fields of chemistry, literature, medicine, and peace. Nobel probably couldn't have dreamed just how important these prizes would become, or that they would even expand.

In 1968, the Swedish central bank, the Sveriges Riksbank, decided to celebrate its 300th anniversary by donating enough money to establish a new Nobel Prize. As the donation came from a bank, it's really no surprise that the award was for the field of economics. Officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, this latest addition to the Nobel tradition is awarded with the other prizes and formally recognized by the Nobel Foundation. The recipients are experts in economics who must meet the same simple criteria as laureates in other Nobel fields: change the world.

The Sveriges Riksbank funded the Nobel Prize in Economics
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1969

There are over 70 winners of the Nobel Prize in Economics, so for now we're just going to focus on some of the most influential, starting with the first. The prize was first awarded in 1969, making Ragnar Frisch and Jan Tinbergen the first laureates. Frisch (1895-1973) was the Norwegian economist who coined the terms microeconomics and macroeconomics. Tinbergen (1903-1994) was a Dutch economist and statistician who helped found the multinational organization Economists for Peace and Security. Together, Frisch and Tinberger were awarded the first Nobel Prize in Economics for their work in developing and using ''dynamic models for the analysis of economic processes''. Basically, they helped found economics as we know it. That's definitely worth recognition.

1986

From 1969, we jump forward to 1986. In this year, James Buchanan Jr. joined the ranks of Nobel laureates for his work in public choice theory. Buchanan (1919-2013) was an American professor who helped create economic models to explain how people in the public sector (like politicians) make decisions. That's what public choice theory explores: the factors that influence behavior of policy-makers and other bureaucrats. Buchanan's work showed that public actors are just as motivated by self-interest as private actors, challenging long-held assumptions about public behavior. This has helped us to better predict how policy-makers will act and react, and adjust our political policies so that self-interest doesn't outweigh the greater good.

1994

Another major economic theory was part of the 1994 joint prize shared by John Harsanyi (1920-2000), John Forbes Nash Jr. (1928-2015) and Reinhard Selten (1930-2016). Each of these men were integral in the development of game theory, the mathematical analysis of conflict and cooperation between intelligent subjects. The1994 Nobel Prize was specifically attributed to their work in non-cooperative games, or those where subjects make non-binding agreements and therefore have to make decisions based on how they think the other party will behave. These ideas are applied in a range of policies, informing decisions on business and foreign policy alike.

2003

The first decade of the 21st century was marked by financial troubles, so it's fitting that some of our most important financial theories were recognized in this time. In 2003, the Nobel Prize in Economics was shared between Robert Engle III (b. 1942) and Clive Granger (1934-2009), for their work in developing different models of analyzing economic time series (sequences of numbers collected at regular intervals). The theories of these men completely changed how economists interpreted financial and macroeconomic information.

Robert Engle III in 2003
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