3 Share Nobel Prize in Economic Sciences

Oct 16, 10:42 AM

Current Headlines: By From news reports

Leonid Hurwicz, Eric Maskin and Roger Myerson, all from the United States, were awarded the Nobel Prize in economic sciences on Monday for laying the foundations for mechanism design theory.

"The theory allows us to distinguish situations in which markets work well from those in which they do not," the Royal Swedish Academy of Sciences said in Stockholm. "It has helped economists identify efficient trading mechanisms, regulation schemes and voting procedures."

Hurwicz, 90, a U.S. citizen born in Moscow, is an emeritus professor at the University of Minnesota in Minneapolis. Maskin, 56, is a professor at the Institute for Advanced Study in Princeton, New Jersey. Myerson, 56, is a professor at the University of Chicago.

The three will share a prize of 10 million kronor, or $1.56 million, officially known as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

The award has been given out since 1969 by Sweden's central bank. Past winners include Milton Friedman, Amartya Sen and Friedrich August von Hayek.

Edmund Phelps of Columbia University won last year for his theories on inflation expectations and unemployment.

The economics prize is the last of this year's Nobel awards, after last week's physics, chemistry, medicine, peace and literature announcements. The prizes have been given out since 1901 after being established in the will of Alfred Nobel, the Swedish inventor of dynamite, who died in 1896.

Before this year's prizes, 37 U.S. economists, eight British economists, three Norwegians and two Swedes have received the economics prize. Two with joint Israeli-U.S. citizenships have also won, while economists from Canada, Germany, France, the Netherlands, India and the former Soviet Union each won once.

Given the churning turmoil of global markets sparked by the U.S. subprime crisis, soaring oil prices and a renewed strength by foreign currencies, it might have seemed appropriate that any of those issues could figure in determining the winner of this year's Nobel economics prize.

But watchers of the secretive prize had said that it was too tough a call to make given that the people who ultimately decide the winner - or, in years past, winners - tend to favor economic theories that have had time to take root, grow and prove resilient.

Speculation on this year's prize included economists who dealt with international trade, macroeconomics and the labor market, among others.

Hubert Fromlet, the chief economist of Swedbank in Stockholm, said Jagdish Bhagwati, a noted proponent of free trade and critic of opponents of globalization, was one of his favorites.

"International trade is probably worth a prize," he said, noting that the Indian-born Columbia University economics professor was an external adviser to the World Trade Organization and served as a special policy adviser on globalization to the United Nations.

Other potential candidates included the macroeconomists Robert Barro and Paul Romer, the arbitrage pricing researcher Stephen Ross, as well as Jean Tirole of France and Assar Lindbeck of Sweden, Fromlet said.

Previous winners of the prize have recognized research ranging from how the control of information affects markets to welfare economics used to explain the mechanisms behind famine and poverty.

Thomson Scientific, which tries to predict winners partly by analyzing citations in academic journals, said Tirole's work on industrial organization, game theory, banking and finance had increased speculation he could win.

Originally published by Bloomberg, AP.

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