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Three US based academics share Nobel Prize in Economics
Nobel Prize

Three US based academics share Nobel Prize in Economics

2 min. 11.10.2021
David Card, Joshua D. Angrist and Guido W. Imbens honoured for their work using experiments which draw on real-life situations
Guido W. Imbens (left), Joshua Angrist (centre) and David Card (right) have been jointly awarded the Nobel Prize for Economics
Guido W. Imbens (left), Joshua Angrist (centre) and David Card (right) have been jointly awarded the Nobel Prize for Economics
Photo credit: AFP

Three US based academics have won the 2021 Nobel Prize for economics for work using experiments that draw on real-life situations to revolutionise empirical research.

David Card at the University of California Berkeley, Joshua D. Angrist of the Massachusetts Institute of Technology and Guido W. Imbens at Stanford University will share the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, officials of the Royal Swedish Academy of Sciences announced in Stockholm on Monday. 

“This year’s economic sciences laureates have demonstrated that many of society’s big questions can be answered,” the academy said on Twitter. “Their solution is to use natural experiments - situations arising in real life that resemble randomised experiments.”

Angrist and Imbens specialised in developing such methodology, while Card used this approach to address key questions in labour economics. 

Research examples cited by the academy include his analysis of the Cuban influx into Miami’s labour market during the 1980s after the country’s then-leader, Fidel Castro, permitted citizens who wanted to leave the island to do so.

Data in economic forecasting

Another study mentioned was Card’s paper together with Alan Krueger, the late economist and onetime adviser to President Barack Obama, that compared the effects of minimum-wage policies in fast-food restaurants in Pennsylvania and New Jersey. Imbens, speaking on Bloomberg Television, highlighted Krueger’s contributions alongside the winners’ work. 

Questioned about the role that certainty about data plays in economic forecasting, he said that’s something he wonders about a lot. 

“Traditionally we’ve certainly erred on the side of putting too much faith in the models,” Imbens said. “So a lot of the methods I’ve been developing have been trying to get away from that and trying to make these methods more robust.” 

The professor didn’t hear the phone ring when contacted in the early hours of his morning in California about having won the prize. 

“I missed the first call - I got the second one,” he said. “I was sleeping well. I wasn’t expecting this.”

Prize money

The winners’ work chimes with a focus for the award on real-world applications of the economics discipline in recent years. The 2020 laureates, Paul Milgrom and Robert B. Wilson of Stanford, invented new auction formats used in mobile-phone frequencies, while researchers whose work ranged from inequality to climate change have been among other prior recipients this century. 

The winners of the economics prize will share award money of 10 million krona (€989,000), with Card getting half of it and the other two receiving the rest.  

The announcement on Monday means 89 men have now won in this category. The economics prize has a particularly poor record of honouring women compared to the other more longstanding Nobel awards, and had never done so until Elinor Ostrom won in 2009. In 2019, Esther Duflo became the second female recipient. 

The peace prize given on Friday to journalists Maria Ressa and Dmitry Muratov is the only one this year to have gone to a woman. 

Alfred Nobel, the Swedish inventor of dynamite who died in 1896, left much of his fortune for the creation of the annual prizes in physics, chemistry, medicine, peace and literature. 

Sweden’s central bank added the prize for economics in 1968. William Nordhaus, Paul Krugman, Amartya Sen and Milton Friedman are among the most well-known recipients of the award. 

©2021 Bloomberg L.P.

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