Come October 13, 2008 and we will get to know who will get the Nobel Prize in Economics for 2008. One can see the process of nomination and the nominators here. The picking for a particular year begins as early as September i.e. for 2008 the process began in Sept 2007.
Usually by September of the award year economists and media start discussing the probable candidates. Thomson Scientific, quite successful in its predictions usually starts off the list of probables but so far it has not taken out its list (It has released its 2008 predictions; see below in Addendum) . My previous post tells me it took out its list around Sept 27, 2008. So, the list must be anytime soon. In 2007, the award was given on 15 Oct 2007.
However, some predictions have started. Rediff has a neat presentation saying this time an Indian-born is expected to win the Prize. (pity we can only expect an Indian born economist to win a Nobel Prize as we hardly do any quality research in India) .
The list of probable Indian born economists is well-known and has been there for a long time – Jagdish Bhagwati, Avinash Dixit and Partha Das Gupta (Joseph Stigilitz’s favorite candidate).
It also points economists like Paul Romer, Robert Barro, Paul Krugman, Eugene Fama, Gene Grossman etc are also in the fray.
My pick: Jagdish Bhagwati as he has been on the waiting list for a long time and it might just get the Trade Agenda going.
Also Gene Fama/Kenneth French as most people who have contributed to development of financial economics have been awarded but their name is missing . Two kinds of people have contributed to finance. One who have worked majorly in the field like – Miller, Sharpe, Markowitz, Scholes, Merton and all have been awarded. And there is the second list who have contributed to finance either as a seperate work or indirectly- Samuelson, Tobin, Modgiliani, Akerlof, Stigilitz, Kahneman (his insihghts led to development of behavioral finance) etc. And again they all have been awarded.
However, Fama/French the persons who led to the development of Efficient MArkets Hypothesis, on which most of finance is based is still missing from the list. High time they are rewarded.
But again, I think Fama/French will be given a miss looking at the developments in fin markets. This way they might miss it every time as the financial markets keep collapsing now and then. Though I think it is the right time to award the duo and pass on the message that one can’t make money from financial markets forever, which is what the financial firms keep trying to do.
Markets are efficient and soon find their correct levels. Most markets may not be in the strong EMH category but are surely somewhere in the semi-strong category. Fancy models etc may help you get some returns initially but not always. The problem is all the firms start doing the same thing after seeing returns made by someone and they all end up in a mess.
Most of the people get these basic lessons in their B-Schools but forget the fundamental lesson while in practice.
I will keep you posted on the other predictions.
1. I have a post analysing the Clark Medal and Nobel Prizes. Interested readers can take a look
2. Thomson Scientific has released is predictions for the year 2008. See the list here. This is a very different list from the rediff one. I only have read Martin Feldstein from the list. I have read a bit of Thomas Sargent and Chris Sims as well, but they are just too technical for me.
Martin Feldstein’s nomination is for his contribution in variety of fields where as others are for specific contributions.
Paul Krugman has been given the prize for 2008. See my post here