This year’s Economics Nobel has been awarded to Thomas J. Sargent, William R. Berkley Professor of Economics and Business, New York University and Christopher A. Sims, Harold B. Helms Professor of Economics and Banking at Princeton University, “for their empirical research on cause and effect in the macroeconomy”.
Considering the financial troughs and valleys of the last decade one would be justified in thinking economics to be a “black art” rather than a science. Economists blame greedy bankers and profligate and irresponsible governments (read politicians) while the bankers and speculators blame the inaccurate and arrogant economists and their flawed models. Alan Greenspan was a darling of the right and is now seen as being one of the key individuals responsible for the sub-prime fiasco. Paul Krugman, a noted critic of George Bush, won the Nobel prize in 2008 for his work (or perhaps his obsession) with international trade. Yet his solutions for the sub-prime crisis seem simplistic, have been heavily criticised and don’t seem to work.
There is a school of thought that Economics should never have been elevated to the status of the Nobel prize. It is not one of the Nobel Prizes established by the will of Alfred Nobel in 1895, but is commonly identified with them. Officially it is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel and was first awarded in 1969.
In his speech at the 1974 Nobel Banquet Friedrich Hayek stated that if he had been consulted whether to establish a Nobel Prize in economics he would
“have decidedly advised against it” …. primarily because “the Nobel Prize confers on an individual an authority which in economics no man ought to possess. .. This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.”
Tags: Christopher A. Sims, economics, Nobel prize, Sveriges Riksbank Prize in Economic Sciences, Thomas J. Sargent
The k2p blog 
October 12, 2011 at 5:49 pm
I know Thomas J. Sargent’s work, The Big Problem of Small Chang , co-authored with Francoise Velde. On the NumisSociety message board, I noted:
“Sargent and Velde compiled an impressive fund of stories, largely from the Middle Ages when there was a plethora of freely circulating independent coinages. They document frequent famines in penny coins (and fractions for them) — and the ineffective countermeasures. This book opened my eyes to medieval commerce. That said, I had some difficulties. Despite four classes in university economics, I could not always follow their theoretical explanations for the events. The Cato Institute had the same problem.”