The 10 most recent Nobel winners in economics

Angus Deaton, a micro-economist at Princeton University, has just been awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The award recognizes “his analysis of consumption, poverty and welfare”. The Royal Swedish Academy of Sciences, announcing the winner, noted:

To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics and development economics.

Deaton joins the economists below in being lauded for economic achievements that influence society.

2014: Jean Tirole – “for his analysis of market power and regulation”. Tirole’s research, which began in the 1980s, contributed largely to the further study of regulation in economics, and has helped governments better understand how to regulate large companies.

2013: Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller – “for their empirical analysis of asset prices”. Their research led to a better understanding of why stock and bond prices change, and how quickly that information is incorporated into markets.

2012: Alvin E. Roth and Lloyd S. Shapley – “for the theory of stable allocations and the practice of market design”. If someone needs an organ transplant, there are specific guidelines to make sure they get the most compatible donor to ensure the highest rate of success. Roth and Shapley showed how that same principle could be applied to economic assets.

2011: Thomas J. Sargent and Christopher A. Sims – “for their empirical research on cause and effect in the macro-economy”. Working separately, these two rewrote how central banks analyse the real-world outcome of their decisions.

2010: Peter A. Diamond, Dale T. Mortensen and Christopher A. Pissarides – “for their analysis of markets with search frictions”. Their research helped to explain why unemployment could be so rampant in a world with so many job openings.

2009: Elinor Ostrom – “for her analysis of economic governance, especially the commons” and Oliver E. Williamson “for his analysis of economic governance, especially the boundaries of the firm”. Elinor Ostrom showed that common property, such as pastures, lakes and woods, could be managed successfully without the intervention of government or privatisation. Oliver Williamson showed how firms could act as structures for conflict resolution.

2008: Paul Krugman – “for his analysis of trade patterns and location of economic activity”. Krugman combined the study of international trade and economic geography to better understand the effects of free trade. His work also contributed to the understanding of urbanisation.

2007: Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson – “for having laid the foundations of mechanism design theory”. Adam Smith’s concept of the invisible hand cannot account for all the variables of modern market structures. The work done by Hurwicz, Maskin and Myerson formulated “mechanism design theory”, which helped to improve our understanding of all the individual mechanisms within a market.

2006: Edmund S. Phelps – “for his analysis of intertemporal trade-offs in macroeconomic policy”. How will economic policy, such as low interest rates, affect future expectations, and thus future policy-making? Phelps’ research helped to answer these questions.

2005: Robert J. Aumann and Thomas C. Schelling – “for having enhanced our understanding of conflict and cooperation through game-theory analysis”. Aumann and Schelling used game theory to understand why some succeed in establishing cooperation while others remain mired in conflict.

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Author: Donald Armbrecht is a freelance writer and a social media producer.

Image: A bull and a bear styrofoam figurine are seen in front of the DAX board. REUTERS/Alex Grimm