Monday, September 22, 2008

Possible Economics Nobels?

And on a different note, here are my thoughts on possible recipients for this years Sveriges Bank Prize in Economic Science in Memory of Alfred Nobel. First, I hope that it does not go to either of two prominent macroeconomists who regularly get mentioned. This would be an extremely inappropriate year for such, given what is going on. However, here are five I could live with who I think are on the list, at least one of whom I do not think has been publicly mentioned, or at least not much.

William Baumol, for lots of things
Jagdish Bhagwati with Avinash Dixit, for international trade theory
Gordon Tullock with Anne Krueger, for rent seeking
Benoit Mandelbrot, possibly with Eugene Fama, just to freak everybody out, although Mandelbrot is the more deserving in my view (for complexity) but certainly for recognizing the reality of fat tails in financial markets, now more evident than ever (if they give it Fama and not Mandelbrot, that would be a ridiculous farce).
Richard Easterlin, for happiness. He is the man on that one, and deserving. Of this group, it is him and Mandelbrot whom I would most like to see.

BTW, to Brenda, there ought to be one for ecological economics, but I doubt this is the year, and I am not sure who should get it.

18 comments:

Anonymous said...

What's wrong with Herman Daly for ecological economics - he started the movement.

Peter Dorman said...

The only possible choice for environmental/ecological economics would be Martin Weitzman. His prices & quantities paper brought statistical uncertainty into policy in a big way, and his latest stuff on small sample size and fat tails is important. In between he put out a number of influential papers, but his share economy never caught on. Are there reasons why he would not be considered?

As for ecological economics per se, it doesn't have an advocate who has standing in economics. I don't want to rehash old debates, but Daly, for all his charms, made fundamental errors in his economics. In particular, he was egregiously wrong in what he wrote about capital mobility and trade theory.

I personally think Brock has done important work on resilience, but the prize is awarded for work that attracts followers, and there is not exactly a stampede to resilience studies.

rosserjb@jmu.edu said...

On finance, I would not sneeze at adding Thaler for behavioral fin.

Enviro/ecol has a number of possible candiates. I doubt they would give it Daly; Weitzman is more likely, but there are quite a few others, some deserving but not likely, and others more likely.

achorripsis said...

Is contestable markets regarded as an important enough contribution to give Baumol the prize?

Anonymous said...

jagdish baghwati had a nice debate in sci. am. with herman daly (around '94 i think). he pointed out, like larry summers (famous for many profound ideas---women genetically prefer cooking) that it doesn't make sense to clean up or protect the mexican environment because mexicans live short anyway---pay them minimum wage today and the future has zero value (whats the discount rate?). for that he deserves a noble prize (he may need the money given the stock market) along with anne krueger, another (in this case) hero/ine.

rosserjb@jmu.edu said...

brian,

Baumol has done lots more than contestable markets over the years, although much of it is stuff people do not know he did, including early work on economic dynamics and speculative bubbles. Friedman claimed to be proving Baumol in particular wrong, when he argued that speculation was always stabilizing because trend chasers would lose money and get wiped out, hack, cough. Baumol said they could destabilize markets. Guess who was right.

BTW, the proper name of the prize is not Sveriges Bank, but Sveriges Riksbank.

Regarding Bhagwati, I have mixed feelings, but there has been no prize for international trade for ages, and he and Dixit are the obvious candidates, for better or for worse. I would take them over the two macroeconomists I continue to refuse to name, or a prize to Fama by himself or with some other fan of the efficent markets hypothesis in finance, now looking utterly ludicrous.

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YouNotSneaky! said...

"the two macroeconomists I continue to refuse to name"

Uh, does one of their names start with a B?

rosserjb@jmu.edu said...

yns,

Yes, and the other, the one I am even more down on, begins with an F.

kevin quinn said...

Barkley, I give up: who's the F? B I agree with you on B, in so many ways an arrogant ideologue.

Myrtle Blackwood said...

Barkley said: BTW, to Brenda, there ought to be one for ecological economics, but I doubt this is the year, and I am not sure who should get it.

I think it should go to my grandmother. She grew vegetables, fruit. Raised chickens and baked them frequently. Chopped wood. Sewed. Cooked/compiled every meal and snack her family ate. Inadvertently entertained her grandchildren. Walked to town to do the shopping (no car). Offered free accommodation to her extended family and raised a family during the Great Depression.

Anonymous said...

I have a terrible record of prediction but I'd suggest a couple of outsiders:

1. David Hendry - not only for his contributions to forecasting, but for PcGets, which would be the first time the Nobel had been awarded for a piece of software.

2. On a similar note, someone for Bayesian econometrics - probably Zellner, though this field might be a bit young.

3. Jean Tirole is always on my list and never on anyone else's and I don't understand why, but his work on financial regulation might be considered topical.

of Barkley's list:

Baumol - agree entirely.
Bhagwati/Dixit - don't really agree, their contributions to trade theory were solid and important but hardly earth shattering.
Tullock - quite likely but would *hate* this one - how many prizes are they going to give for the same idea?
Mandelbrot - never. This is voted on by economists. Like the idea of doing the Myrdal/Hayek thing, but nobody's on Mandelbrot's side.
Easterlin - also think this is much too young a field.

Kevin: the only dreadful macroeconomist I can think of whose name begins with F was the guy who wrote a paper on Social Security based on a programming error.

rosserjb@jmu.edu said...

No, I am not going to say who F is, although his supposedly Nobel worthy work has provided the underpinnings of the push to privatizing Social Security, a pet peeve of mine.

BTW, somebody else high on the list who might share it with a couple of these folks is Oliver Williamson. A few years ago, Geoff Hodgson pointed out to me that Oliver Williamson is the most cited economist of all time. The mention of Tirole made me think of Williamson, as I think he is in line ahead of Tirole, although they could share it.

There probably will be another one for econometrics in the not too distant future, and the folks mentioned are certainly possibilities for that.

kevin quinn said...

Silly me, I thought *that* F. had already gotten one! Yes on Tirole. Also Peter Diamond! I would give it to Herb and Sam, but that's just me. (-;

rosserjb@jmu.edu said...

kevin,

Not likely, but you never know. I would say that Ernst Fehr is more likely than either of them.

YouNotSneaky! said...

Hmm, I thought the other macroeconomist might begin with an S, just wasn't sure if it was Sa or Sc. But I can see why you're not liking F. Tirole definitely's deserving.

rosserjb@jmu.edu said...

yns,

I have a higher opinion of S than B or F, but I doubt it will be for either macro or econometrics this year, and probably not finance either, given how totally insane things are right now.

Really, the one I would like for this year, and I think he has a shot, although there has not been that much talk about him, is the Father of Happiness Studies, Easterlin.

Ken Houghton said...

Dixit, yes. Dixit & Bhagwati without Krugman, no.

Fama makes me laugh. Especially right now, when the other choice is deep, abiding depression, with or without a capital D. (Though in combination with Mandelbrot is inspired.)

That Baumol doesn't have one yet is scary. And, at 86, he should be odds-on over Easterlin.