Prize in Economics in Memory of Alfred Nobel 2017 my personal Nobel Prize favorites

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1 Hubert Fromlet Stockholm / Kalmar/ Växjö, September 26, 2017 Affiliate professor of International Economics at Linnaeus University (LNU/Linnéuniversitetet), Kalmar and Växjö / Sweden hubert.fromlet@gmail.com hubert.fromlet@lnu.se tel /phone Contact? Preferably by gmail or SMS since I am traveling and having many meetings and lectures the week before the announcement. I will get back to you as soon as possible. Kontakt helst via gmail / sms. Prize in Economics in Memory of Alfred Nobel 2017 my personal Nobel Prize favorites Comments in English It is always hard to predict the winner(s) of the Nobel Prize in Economics (formally: The Riksbank s Prize in Economic Sciences in Memory of Alfred Nobel ). There are always around serious candidates. In the past ten years, I predicted 14 out of 20 winners by mainly checking out the research areas which primarily deserved the award and by then trying to find the most outstanding researchers in these specific areas. This year, however, I do not focus on the most probable forecasts for the leading candidates but concentrate on summing up the names I myself would like to give the Prize to. For this purpose, I present a list of one, five, ten and forty personal favorites, some of them even with only small outsider chances. Nevertheless, this year s winner(s) may be found in my own preference list all the same. However, my main criterion this time is to find the candidates who deserve the award in my view in the first place rather than using probabilities for winning as my main objective for the lists (like in previous years). I also make personal judgments i.e. also here without considering probabilities - what concerns the most interesting and deserving research areas. Research areas that should be focused on in 2017 are according to my own preference: growth and development theory, poverty labor market economics/the welfare state from both the macroeconomic and the microeconomic angle, banking (not monetary policy), international trade, micro areas like the theory of firms, entrepreneurship, human capital formation, innovation which all could be part of the New Growth Theory and endogenous growth creation, microeconomic experiments, and finally behavior, politics, law, the environment, health, sociology - all linked to economics. Most of my personal favorites come from the U.S. the country with the biggest financial resources for economic research (see my Top-40 list). If I have to select another European economist, Philippe Aghion, Alberto Alesina, Richard Blundell and Assar Lindbeck would be my strongest candidates (without forgetting that some of the Europeans have or have had academic positions also in the U.S.). From Asia by birth - Israel excluded - I see Avinash Dixit as my preferred candidate together with Jagdish Bhagwati, Partha Dasgupta, Hashem Pesaran and Nobuhiro Kiyotaki. From Latin America, I would like to welcome Hernando de Soto as this year s Prize Winner. Regrettably, the Nobel Prize Committee missed in recent years to award the late Anthony Atkinson, William Baumol and Stephen Ross. I also would like to mention a couple of names in chapter C who would be good but somewhat courageous choices. In my view, there should be room for more courageous Prize decisions sometimes as well. There also some female candidates who indeed should have reasonably good chances.

2 My personally preferred prize candidates - mina toppkandidater enligt egna preferenser Again, I want to underline that the lists below reflect my own preferences and not forecasts in line with probabilities even if very probable winners also can be found in my own preference lists. Most of the text is in Swedish. When necessary for foreign readers, I add words and explanations in English. The different lists look as follows: A. My own single favorite for the Nobel Prize in Economics 2017 B. My personal top-10 list for the Nobel Prize in Economics 2017 / no forecast C. 10 courageous but eligible choices D. My preferred top-40 list for 2017 / no forecast E. 10 (research-linked) combinations of names F. My personal favorite important research ares Nedanstående listor innehåller mina egna favoriter - som redan antytts - och ej nödvändigtvis endast de mest sannolika vinnarna, även om sådana kandidater också förekommer på listorna och till och med dominerar dem. I denna skrift analyseras uteslutande mina favoritkandidaters rent vetenskapliga insatser och ej rankningslistor med publicerade textvolymer, citeringar och dylikt. Totalt sett har ekonomipriset fortfarande många namn och forskningsområden att belöna. A.My own single favorite for the Nobel Prize in Economics 2017 Min egen toppfavorit rent subjektivt (ej prognos): Paul Romer, efter en hård fight med Jaghdish Bhagwati, Douglas Diamond, Assar Lindbeck och Robert Nordhaus. Philippe Aghion, Avinash Dixit och Marc Granovetter kommer direkt efter denna kvintett. Samtliga ovan citerade fem (åtta) namn är mina personliga 5 toppkandidater / 5 top candidates according to my own preference 2017: It has to be him (Romer) at some point for his pioneering work with endogenous growth anser jag om Paul Romer p g a hans avgörande roll vid framtagningen av den viktiga nya tillväxtteorin ( New Growth Theory, NGT) trots hans ibland mycket frispråkiga kommentarer. Hans nuvarande jobb som chefekonom for Världsbanken ser jag inte som något hinder. NGT blir framöver ännu viktigare i samband med digitaliseringen, enskilda utvecklade länders framtid och även många underutvecklade länders ansträngningar att lämna fattigdomen bakom sig. 2

3 B. My own top-10 list for the Nobel Prize in Economics 2017 Min personliga 10-i-topp lista (no ranking, no forecast) Aghion, Philippe (Harvard, LSE): for his research on institutions, innovation and growth Banarjee, Abhijit / Duflo, Esther (MIT): for their pioneering experiments to explain poverty Bhagwati, Jaghdish (Columbia Univ): for his research on the benefits of free trade Barro, Robert (Harvard): for life-time research achievements in various economic fields Diamond, Douglas (Chicago): for his research on banks, financial crises and liquidity Dixit, Avinash (Princeton): for research on organizations, institutions, international trade Lindbeck, Assar (Stockholm): for research on insider/outsider problems on labor markets Nordhaus, William (Yale): for his work with environment economics and modeling Granovetter, Mark (Stanford): for his research on the importance of social networking Romer, Paul (Världsbanken, NYU): for his research on modern national growth factors Welcome to all of you you all deserve the Prize! C. 10 courageous name choices but why courageous? Modiga namnbeslut - men varför modiga? Acemoglu, Daron - may be still considered as too young (which is not a plausible reason) Baghwati, Jaghdish - may be regarded as too practical and too little theoretical Dasgupta, Partha - sometimes confronted with the same totally wrong argument as Bhagwati Duflo, Esther - probably considered as too young /too short time for research evaluation Eichengreen, Barry - great (historical) international understanding but rarely on lists before Granovetter, Marc - sociological research often seen too far away from economics (wrong) Lindbeck, Assar - may be seen as too close to the academic sphere in Sweden (ridiculous) Murphy, Kevin has been seen as an outstanding talent for many years, for too long time Nordhaus, William - environment research now too close to current political U.S. problems? de Soto, Hernando - said having insufficient affinity to the world of theory and models I would be glad to see anyone in this group as this year s winner of the Nobel Prize in Economics. They all deserve to win. 3

4 D. My own preferred top-40 list for 2017 (no forecast) Min lista med 40 namn (egna preferenser / ej prognoser) Top-40 list with my own favorites Research areas Top 40-lista med egna favoriter Forskningsområden (bland andra): Acemoglu, Daron (MIT) Aghion, Philippe (Harvard University) Alesina, Alberto (Harvard University) Angrist, Joshua (MIT) Banarjee, Abhijit / Duflo Esther (MIT) Barro, Robert (Harvard University) Bhagwati, Jagdish (Columbia University) Blanchard, Olivier (MIT, Peterson) Blundell, Richard (LSE) Card, David (Berkeley) Dasgupta, Partha (Cambridge) Demsetz, Harold (UCLA) Diamond, Douglas W. (Chicago) Dixit, Avinash (Princeton) Eichengreen, Barry (Berkeley) Fuller, Wayne / Dickey, David Granovetter, Mark (Stanford) Grossman, Gene (Princeton) Hausman, Jerry (MIT) Helpman, Elhanan (Harvard) Jorgenson/, Dale (Harvard) Kiyotaki, Nobuhiro (Princeton) Kreps, David (Stanford) Lazear, Edward (Stanford) Anne Krueger ( Johns Hopkins) Krueger, Alan (Princeton) Lerner, Josh (Harvard) Lindbeck, Assar (Stockholm) Manski, Charles (Northwestern) Milgrom, Paul (Stanford) Murphy, Kevin (Chicago) Mäler, Karl-Göran (Stockholm) Nordhaus, William (Yale) Romer, Paul (NYU, World Bank) Rubinstein, Ariel (Tel Aviv Univ, NYU) Shell, Karl (Cornell) Shleifer, Andrei (Harvard) Stokey, Nancy (Chicago) Ekonomisk historia, tillväxt, politisk ekonomi Tillväxt- och kontraktsteori, innovationer Politik och ekonomi, finanspolitik Arbetsmarknad, utbildning Experiment i syfte att förklara och lindra fattigdom Tillväxt, humankapital, penningpolitik, konjunktur Frihandel, globalisering, emerging markets Monopolistisk konkurrens (imperfekt konkurrens), ojämlikhet Politisk ekonomi, empirisk (tillämpad) ekonometri Arbetsmarknad, economics of immigration, ojämlikhet Development economics (utveckling), miljö, kost /näring Theory of firms, law and economics, regleringar, NIE Bank och finans, finanskriser, likviditet Organisation, investeringsbeslut under osäkerhet, utrikeshandel Internationell ekonomi, ekonomisk historia Statistik, Wayne-Fuller Test Sociala nätverk i ekonomin Internationell handel och tillväxt, political economy Mikroekonomiska metoder och applikationer, Hausman Test Internationell handel, tillväxt, political economy Tillväxt, produktivitet, IT, miljö, länken ekonomi och statistik Links macro/micro, economic shock model, credit imperfection Dynamiska beslutssituationer/-processer, beteende vid beslut Arbetsmarknad, personnel economics Internationell handel, rent seeking, emerging markets Arbetsmarknad (med experiment), utbildning Entrepreneurial management and finance, innovationer Arbetsmarknaden, insider-outsider -problemet, välfärd Socialpolitik, social interaction, ekonometri, prognosteknik Kontrakts-, auktionsteori, corporative games, prissättning Humankapital, tillväxt, hälsa Miljöekonomi Miljöekonomi, naturresurser Humankapital (modern tillväxtteori, NGT), R&D, innovationer Spelteori, bargaining (with impatience), bounded rationality Tillväxt (endogen), monetary economics Law and Finance, transition economies, behavioral finance Tillväxt, ekonomisk utveckling 4

5 E. 10 (research-linked) combinations of names 10 namnkombinationer med stark forskningskoppling (*observe that this name is not mentioned alone in my Top-40 list) Acemoglu, Daron / Eichengreen, Barry Angrist, Joshua / Krueger, Alan* Banerjee, Abhijit / Duflo, Esther Bhagwati, Jaghdish / Dixit, Avinash / Dasgupta, Partha Diamond, Douglas / Dybvig, Philip* Grossman, Gene / Helpman, Elhanan / Dixit, Avinash Aghion, Philippe / Howitt, Peter* / Romer, Paul Lindbeck, Assar / Snower, Dennis * / Blanchard, Olivier Nordhaus, Robert / Weitzman, Martin / Dasgupta, Partha Shleifer, Andrei / Vishny, Robert* F.My personally favored research areas mina egna favoriserade forskningsområden Macroeconomics - makroekonomi (allmänt, modeller och dylikt): Philippe Aghion (även mikro, Harvard), Robert Barro (Harvard), Olivier Blanchard (MIT), Partha Dasgupta (Cambridge), Barry Eichengreen (Berkeley), Gene Grossman (Princceton), Elhanan Helpman (Harvard), Dale Jorgenson (Harvard), Anne Krueger (även mikro, Johns Hopkins), Paul Romer (även mikro, NYU), Nancy Stokey (Chicago) Microeconomics - mikroekonomi (kontrakts- och auktionsteori, theory of firms, theory of incentives, institutionell ekonomi: Harold Demsetz (UCLA), Avinash Dixit (Princeton), Esther Duflo (MIT), (Harvard), Josh Lerner (Harvard), Paul Milgrom (Stanford), David Kreps (Harvard), Ariel Rubinstein (Tel Aviv, NYU), Andrei Shleifer (Harvard), Karl Shell (Cornell), Hernando de Soto Finance, banking: Douglas Diamond (Chicago), Nobuhiro Kiyotaki (Princeton) Econometrics / statistics: Jerry Hausman (MIT) / Wayne Fuller (Iowa State University) Interdisciplinary research / tvärvetenskaplig forskning Behavioral economics Beteende & ekonomi / Environmental economics Miljö & ekonomi Ariel Rubinstein ( bounded rationality, Tel Aviv, NYU) William Nordhaus (Yale), Martin Weitzman (Harvard) Health economics Hälsa & ekonomi: Charles Manski (more indirectly, Northwestern). Kevin Murphy (Chicago) Social economics Sociologi & ekonomi Mark Granovetter (Stanford), Esther Duflo (MIT) Political economics Politik & ekonomi Alberto Alesina (Harvard), Richard Blundell (LSE), Daron. Acemoglu (MIT) 5

6 Avslutande kommentar / Conclusion Vadslagningsbyråernas odds ger sällan rätt vägledning. Egna analyser har också visat att inte ens antalet artiklar i de främsta ekonomiska tidskrifterna behöver ge rätt fingervisning. Dels ligger även tidigare Nobelpristagare ganska långt nere på den typen av rankning. Dels förekommer en hel del rena statistiker/ekonometriker bland de främst placerade artikelskribenterna som nog aldrig kommer att få priset. Likväl existerar också belöningsvärda matematiska insatser. Mycket talar för att en banbrytande forskningsinsats för cirka år sedan kommer att prisbelönas även denna gång. Nobelpriskommittén vill alltid undvika en belöning av relativt unga forskningsresultat, hur intressanta de än mår vara. Man vill inte någon gång i framtiden tvingas erkänna att idag trovärdiga resultat inte håller i det långa loppet. Relativt ung om än framgångsrik - forskning har därför mer begränsade chanser att ta sig fram redan nu. Det är också den främsta anledningen till att kvinnliga kandidater alltjämt är ganska fåtaliga. Detta otillfredsställande faktum kommer dock att förändras med tiden. Eftersom ovansående listor uteslutande återspeglar mina egna preferenser, har jag i denna översikt likväl tagit med några yngre och/eller mindre diskuterade namn på mina kandidatlistor. Vissa, något modiga beslut kan ibland vara angelägna courageous decisions that are summarizing in this overview also a number of candidates who deserve to receive the Nobel Prize in Economics even if they are not part of usual or ongoing speculations. Sometimes, more courageous prize decisions can make a lot of sense. Hubert Fromlet Linnéuniversitetet (Linnaeus University) / Sweden,