October 2009 Archives

My Prediction for the Nobel Prize in Economics

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Although I’m not an economist, I work in the part of Political Science just across the border and have many good friends in the economics profession. So just as they are, I am swept up in the excitement of the pending announcement of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (otherwise known as the Nobel Prize in Economics). There are a lot of great candidates this year including Jean Tirole, William Nordhaus, Paul Milgrom, Tom Sargent, and a whole host of my Princeton colleagues. But recently a dark horse candidate has emerged who now seems likely to win in a walk. So I’m conceding the inevitable. The 2009 Nobel Prize in Economics will go to Barak Obama.

Consider the following:
 
  • Whereas Tirole, Nordhaus, Milgrom, and others have made important and fundamental scholarly contributions to economic theory and policy analysis, only Obama has the audacity to hope for better economic policy in the future. Can he design a health care system that covers everyone and saves money? Yes, he can! Can he reengineer the financial system to eliminate systemic risk, protect consumers while maintaining the benefits of modern finance? Yes, he can! Can he reduce greenhouse emissions without reducing jobs and economic growth? Yes, he can! What actual economist would dare say those things? For his vision alone, he deserves the prize.
  • Obama has never been associated rational expectations theory or the efficient markets hypothesis. In fact, he’s turned his administration into one big Behavioral Economics Seminar.
  • I’ve heard rumors that Obama still plans to broker a peace treaty between Paul Krugman and Bob Lucas. Unfortunately, the track 2 negotiations seem to have broken down.
  • The Scandinavians could really stick it to George Bush by giving Obama two Nobel Prizes.
  • He taught at the University of Chicago.
How could he lose?