The Nobel Laureates and their Legacies

The Nobel Laureates and their Legacies

FPJ BureauUpdated: Saturday, June 01, 2019, 02:27 AM IST
article-image

Professor B.S.R Rao was the Head of the Department of Economics in Pune University, Teaching Fellow at Wharton School of Finance and Commerce. He was a Ford Foundation Scholar. A member of the University Grants Commission and the Union Public Service Commission he has brought his immense experience to bear on this monumental book which is an assessment of the contribution of 67 Nobel Prize Winners in Economics. This is perhaps the only work of this type offering a wealth of data on all the Nobel Laureates in Economics.

The Central Bank of Sweden instituted in 1968, to mark the tercentenary celebrations “The Sveriges Riksbank Prize” in Economic Sciences. The awards were in the memory of Alfred Nobel in whose name awards were given earlier for the following subjects — Physics, Chemistry, Physiology or Medicine, Literature and Peace. Only in 1969 a prize for Economics was endowed by the Central Bank of Sweden.

The Royal Swedish Academy decides on the prize-winner. The Economics Prize Selection Committee of the Academy commissions expert studies of the most prominent candidates. The Committee presents its award proposals to the Social Science Class of the Academy in the form of a report including all selected expert studies. The Class suggests one or two laureates and the final decision is taken by the entire academy.

The Nobel Prize in Economics has been awarded to sixty seven laureates from 1969 to 2010 (period covered in this book). Every student of Economics has to grasp the development in the various fields of economics. An ideal introduction would be to understand the contribution of the Nobel Laureates and this precisely is what Prof Rao has successfully done.

The book summarises major contributions of all the Nobel Prize winners in economics. A brief biographical note is furnished of each of the economist indicating the travails they underwent and there is a clear and cogent presentation of their major findings. The book also gives a summary of their entire work and gives a list of their books and articles and also works on these economists by others. The author has relied on the citations presented with the awards, which makes it authentic.

Instead of covering the economists seriatim, Prof Rao has divided them into seven groups based on their subjects of study. In this he has been guided by the classification of Lindbeck’s article, “The Sveriges Riksbank prize in Economic Sciences in memory of Alfred Nobel”. The seven groups are 1. General equilibrium Theory (5 economists); 2. Macroeconomics (18); 3. Micro-economic Theory (10); 4. Financial Economics (5); 5. Inter-disciplinary Research (13); 6. New Methods of Economic Analysis (11); 7.Game Theory (5).

In a brief review it would not be possible to cover all the 67 economists. We shall restrict to a few laureates. John Hicks formulated multi-market stability conditions and was the first to prepare a rigorous dynamic analysis of capital accumulation. He presented a widely used aggregate general equilibrium analysis with four markets — commodities, labour, money and credit. Paul Samuelson extended Hicks contribution through analytical sophistication.

Macroeconomics has attracted the maximum number of prizes. Milton Friedman joined together formal consumption theory and applied it to a specific sector of the U S economy. His study is a monetary inspection of macro-economic fluctuations in the U S economy. Paul Krugman won the prize for his research in international trade and economic geography. The Krugman model explained lucidly the foreign trade pattern and presented a comprehensive theory of location of labour and firms.

George Stigler was awarded the prize for his studies of “industrial structures, functioning of markets and causes and effects of public regulation”. He pioneered the field of information economics, bringing information costs specifically into his analysis. Vernon Smith and Daniel Kahneman developed methods for conducting laboratory experiments in economics.

Amartya Sen’s research on the borderline between economics and philosophy. He scrutinized the philosophical foundations of collective decision and welfare evaluation. Sen has analysed the determinants and consequences of starvation in a number of less-developed countries. According to him reduced aggregate supplies of food has not always been the most important factor for starvation catastrophes.

John Nash, John Harsanyi and Reinhard Selten got their awards for their pioneering analysis of equilibrium in the theory of non-competitive games. Selten’s refinements helped in the proper analysis of markets with few sellers. This is a path-breaking book and compulsory reading for all economists, social workers and an eye-opener for laymen.

RECENT STORIES

Masala Chai For The Soul Book Review: Laugh Your Way Through Troubles

Masala Chai For The Soul Book Review: Laugh Your Way Through Troubles

3 Tips By Meera Gandhi On How To Rise Above A Current Situation

3 Tips By Meera Gandhi On How To Rise Above A Current Situation

Book Review: Roshmila Bhattacharya's Spooked! Is A Captivating Read About Film Personalities' Tryst...

Book Review: Roshmila Bhattacharya's Spooked! Is A Captivating Read About Film Personalities' Tryst...

Author Sandeep Singh Releases Two Books on Indian Temples

Author Sandeep Singh Releases Two Books on Indian Temples

Author Sonal Ved Demystifies Veganism In Her New Book

Author Sonal Ved Demystifies Veganism In Her New Book