Friday, October 12, 2012

Economics Nobel bleg

Tyler Cowen rounds up the chatter around the Eco Nobel. Here's WSJ, and here are the Thomson Reuters predictions. Northwestern has its own list too - it leans heavily towards the Industrial Organization & New Institutional Economics side of affairs. Both good, but rewarded in the recent past.

My contention is, if Jean Tirole and/or Oliver Hart are awarded, so will/should Bengt Holmstrom. Oliver Hart is a forerunner for the incomplete contracts view of the theory of the firm, Holmstrom has done masterful work on the disaggregation of the liquidity and the the connections between corporate finance & macroeconomic phenomena, culminating in what he calls the Liquidity-based Asset Pricing Model. This line of research is extremely promising, and yet to be fully exploited.

But if IO/NIE does not win, the prize really should go to Angus Deaton. Deaton is among the foremost authorities on consumption, inequality & poverty in developing countries, and a lot of his research focuses on India. If you wish to educate yourself on modern interpretations of the challenge of poverty & development in India, Deaton really is person you should listen to. His lack of an axe in the cacophonous debates on this helps- he seems to be intellectually compatible with both Surjit Bhalla & Jean Dreze, something that most Indian readers will find unbelievable.

The American finance gurus - Fama, Shiller, Thaler & Ross are all deserving, but I know who I'm rooting for.