As Nobel Prize Week comes to a close, the 2024 Nobel Prize in Economic Sciences has been announced, awarding Daron Acemoglu, Simon Johnson, and James A. Robinson.
The Nobel Prize in Economics is often referred to as the “youngest” of the Nobel awards, established a full fifty years after the other prestigious categories like Physics and Literature. Instituted in 1968 by the Swedish National Bank to commemorate Alfred Nobel, this prize holds the same esteem as its older counterparts, and is also awarded by the Royal Swedish Academy of Sciences.
Interestingly, despite being the newest addition, recipients of the Nobel Prize in Economic Sciences are generally older, with an average age of around 67. One notable outlier is Leonid Hurwicz, the oldest recipient, who won the award in 2007 at the age of 90. Conversely, the youngest laureate is Esther Duflo, who received her award in 2019 at the age of 46, making her not only the youngest winner but also the second woman to win the prize. In total, only three women have received the Nobel Prize in Economics, with Elinor Ostrom being the first in 2009.
Since its inception in 1969, the Nobel Prize in Economic Sciences has been awarded 56 times to over 90 individuals, although not all recipients are traditional economists. Former Nobel Prize committee secretary Peter Englund once stated, “We define economics broadly, suggesting that anything of interest to economists can qualify as economics, including research from other disciplines.”
For instance, John Nash, renowned for his “Nash Equilibrium” and depicted in the film “A Beautiful Mind,” was primarily a mathematician who shared the award in 1994. Additionally, psychologist Daniel Kahneman received the Nobel Prize in Economics in 2002 for integrating psychological insights into economic theory, particularly regarding human judgment and decision-making under uncertainty.
The 2018 awardees, William D. Nordhaus and Paul M. Romer, were recognized for incorporating climate change and technological innovation into long-term macroeconomic analyses, respectively. Ostrom’s groundbreaking work as a political scientist and one of the founders of the public choice school of thought earned her the distinction of being the first woman to receive this award.
How do these economists impact the world? According to Peter Gardefors, a member of the Nobel Economic Prize committee, the prize is not just about deep theoretical insights; it’s about making economic analysis more human-centric, helping people make better economic decisions. Richard Thaler, a 2017 laureate and professor at the University of Chicago, highlighted the concept of “bounded rationality,” suggesting that sometimes external nudges are necessary for governments, businesses, and individuals to make better choices.
Beyond personal finance, Nobel laureates have also played vital roles in alleviating global poverty. The Nobel committee reports that over 700 million people live in extreme poverty, with nearly 5 million children under five dying each year from easily treatable diseases.
In 2019, Abhijit Banerjee, Esther Duflo, and Michael Kremer tackled global poverty by breaking down complex issues into manageable experiments. For instance, they designed studies to improve child health by investigating educational methods, healthcare systems, and access to credit.
As the Nobel committee noted, “The research conducted by the 2019 laureates has significantly enhanced our ability to combat global poverty. Over just twenty years, their experimental methods have transformed development economics into a thriving research field.”
