Tomorrow, the Nobel Memorial Prize in Economic Sciences for the year 2013 is going to be awarded. Despite my general aversion toward this award, I am very curious about who is going to be this year’s laureate. I also think that this may be a good opportunity to present my own “favourites”. I do not claim my choices to be realistic in any meaningful way of this word – indeed, for most of them I am quite sure that those economists are never going to be awarded the Prize. Which does not necessarily make the exercise less interesting.
To start with, I should mention that there have been a few laureates over the years whom I am quite happy with. Among them there is, of course, the man who has influenced my thinking about economics most – Amartya Sen, who was awarded in 1998 for his contributions to welfare economics. Others include the late Elinor Ostrom (2009, theory of commons; the only woman awarded so far), Joseph Stiglitz (2001, imperfect competition), Robert Aumann (2005, game theory) or Daniel Kahnemann (2002, psychology & the assumption of rationality). Conversely, there are many laureates of the Prize whom I do not consider eligible. These are the majority, I guess.
But let us turn now to those who have not been awarded (yet), but, in my humble opinion, should be. I am going to present them in the order of decreasing probability:
- Nicholas Stern: he may be the only one on my list who indeed has the chance to be awarded some day. His contribution to the economics of climate change has not only been of political importance, but also a major impulse for the economics community. His Review has been discussed much, often in critical terms, and Stern’s analysis certainly has its flaws. But so far, the Review remains a milestone of climate economics, a branch of research that has gained less attention than it deserves. [Other possible laureates in this field: William Nordhaus (despite some doubt), Martin Weitzman (see below), Frank Ackerman.]
- Martin Weitzman: known for his love of mathematics, Weitzman has contributed to many different fields in economics, especially theory of finance and uncertainty analysis. He also developed indicators of biodiversity and – yes, again – made a major contribution to the economics of climate change. While criticising Stern for some modelling choices, he has shown that, under certain assumptions regarding the possible severity of climate change, all the critique of the Review regarding damage functions, discounting factors and so on may be considered meaningless. For this and other contributions to uncertainty analysis especially, he appears to be a deserving candidate for the Nobel Memorial Prize.
- Partha Dasgupta & Karl-Göran Mäler: to of the most influential ecological economists of the European branch of this school (linked to the Beijer Institute of Ecological Economics in Stockholm, Sweden). Their joint work has been mainly devoted to measures of sustainability and well-being, but especially Dasgupta has contributed also to development economics and the theory of social capital. Both are highly acknowledged in the community of environmental economics, of both more mainstream and more heterodox orientations. Furthermore, awarding them would break the dominance of the Anglo-Saxon world among laureates of the Prize – so far most of them have been US-Americans or British, Sen being the only non-Western recipient of the Prize. [Further options in this field: Gretchen Daily, Graciela Chichilnisky, Richard Howarth & Richard Norgaard.]
- Tim Jackson: this proposal may be considered even a little bit more exaggerated than the previous ones. But as a notorious critic of the focus on GDP growth in economic research, I cannot but include in my list here the author the most comprehensive, fact-based and convincing critique of the growth obsession I am aware of. Prosperity Without Growth should in my opinion be obligatory reading for every economics student and, despite some weaknesses (particularly with regard to the role of the financial system in modern economies), perhaps, reason enough to award Jackson the Nobel Memorial Prize. [In a similar vain, I could imagine Dani Rodrik awarded the Prize for his outline of why unconstrained economic globalization is not as good a thing as most economists believe. These would be more symbolic awards for being representative of an important critique of modern economics.]
Of course, the above exercise, my list of “potential” laureates of the Nobel Memorial Prize in Economic Sciences is purely hypothetic. Which is not surprising, since my own thinking about economics does not necessarily reflect the “state of the art”, and thus is unlikely to find reflection in the choices of the Royal Swedish Academy of Science’s committee that awards the Prize. Nonetheless, I am really curious who will be the next laureate(s), being at the same time almost certain that it will not be even William Nordhaus. That would be too much of a post-normal science choice, I guess.
- Nicholas Stern Stern Review
- Martin Weitzman The Role of Uncertainty in the Economics of Catastrophic Climate Change
- Partha Dasgupta & Karl-Göran Mäler Net National Product, Wealth, and Social Well-Being
- Kenneth Arrow, Partha Dasgupta et al. Are We Consuming Too Much?
- Tim Jackson Prosperity Without Growth