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Nobel short list?
The Guardian gives five names: "Robert Barro, Jagdish Bhagwati, Eugene Fama, Paul Krugman and Paul Romer."
Their prediction is Barro, I will go with Fama or Bhagwati. Gordon Tullock and Thomas Schelling should also be on the short list in Sweden, let's hope they are.
When someone starts posting odds, let me know.
Posted by Tyler Cowen on September 10, 2005 at 05:38 AM in Economics | Permalink
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Comments
Baumol has long been discussed as a possible receiver of the prize as well. At least in Swedish media
Posted by: Alex Josefsson at Sep 10, 2005 6:22:42 AM
The Nobel Prize market is at http://www.nobelpreisboerse.de/. Unfortunately, it looks like it may be defunct. I'll send email to the addresses on the site and see if they plan to run the market again this year.
Posted by: Chris Hibbert at Sep 10, 2005 1:47:17 PM
If Krugman wins before Fama, then I will jump off a cliff.
If fact, if Krugman ever wins, then I will jump off a cliff.
It seems to me that someone who renounces every principle of elementary economics just for a New York Times paycheck should be summarily disqualified.
To be a Nobel Prize winning economist, one should actually be, um, an economist.
Paul Krugman isn't anymore.
Posted by: KipEsquire at Sep 10, 2005 1:50:57 PM
Unfortunately, this year the Nobelpreisbörse (Nobel Prize Market) won't open its doors.
Last year Arnold Kling noted that "the winners tend to be people with concepts named after them. Coase theorem. Nash equilibrium. Black-Scholes pricing model. Granger causality. It seems like you're better off with one brand-name contribution than with a bunch of less-famous papers."
I guess every economist has already applied the Hodrick-Prescott filter (Whittaker filter) to smooth a time series...
"Baumol's cost disease", "Barro regression", and "Tullock rectangle" fit the pattern.
Posted by: Michael Stastny at Sep 10, 2005 3:02:07 PM
"If fact, if Krugman ever wins, then I will jump off a cliff"
So Krugman writing something on the NYT that you disagree with erases all his contributions to the field of economics?
Posted by: Dave Collins at Sep 10, 2005 4:50:50 PM
Krugman is a fine economist. Simply claiming he isn't an economist doesn't make him so. So far as I know, no other John Bates Clark Medal winners have said Krugman isn't an economist.
Krugman's critics should read what he has to say to the layman about global trade. Some on the far-left hate Krugman, but I think Krugman has been instrumental in getting the middle and centrist left to embrace free trade.
What makes Krugman so effective (beyond his elegant writing) is that he presents moral cases for trade that would appeal to those who have concern for the poor (I need not repeat them here). Such moral cases are easier for the left to swallow than, say, some Randian "moral" argument that to tell someone what to do is to defeat their inner spirit.
But a hard-liner libertarian stance does not logically follow from economics. There simply *aren't* good reasons for not helping the poor. You'll notice that Krugman isn't arguing for a return to the welfare state, nor does he argue for soak-the-rich levels of taxation, nor for any of those other ideas that we know economically don't work in practice. It's just that Krugman finds the case for having Social Security to be compelling.
Given the devastation from Katrinia, I think you'd find it very hard to argue for an anti-Rawlsian view that somehow spreading the costs of risk around the general population is "immoral." In fact, Rawls would say it would be unjust if you *didn't* spread the costs. To me, I can't accept libertarianism because I find Rawls's arguments so compelling.
Posted by: Macneil at Sep 10, 2005 8:40:04 PM
It wouldn't surprise me greatly if Krugman won, just because the Nobel committee clearly likes tweaking Bush.
Posted by: Ted at Sep 11, 2005 2:07:36 AM
Macneil: I consider myself a hard-liner libertarian, and I can say that there are two types of libertarian arguments for not helping the poor. First is that there is no moral value to be had in coercing one set of people to help another set of people. Second is that people's character is not enhanced by teaching them that failure is rewarded by public support.
The kind of help for the poor that hard-liner libertarians support is the kind that is voluntarily given out of love, and given out with love taking the need of the recipient into account. If you think you can help poor people without love, then you have an odd idea of what constitutes help.
Posted by: Russell Nelson at Sep 11, 2005 3:00:04 AM
Another shared Nobel, this time for imperfect competition and trade: Bhagwati, Krugman, and Dixit?
Posted by: Mark Witte at Sep 11, 2005 10:27:12 AM
Russell: Believe me, I've heard those arguments plenty of times before. The article linked to (from here on MR) on Aug 24, titled "Whither right-wing thought?" sums up the failures of "hard-liner" libertarianism quite nicely. (I hope it's already implied this is just my opinion?)
Arnold Kling had an article on "bleeding heart libertarianism" which essentially argues for a consumption tax which is then given as a negative income tax. Under a system like that you wouldn't be "rewarding" people for failure. Obviously, given the moral importance of the issues here, it is not sufficient to just throw up our hands and say "I guess there's nothing we can do" at the arrival of what a philosopher would consider a rather weak moral argument.
Anyway, back to the main point. Not being a libertarian does not necessarily imply that you are not an economist.
Posted by: Macneil at Sep 11, 2005 1:06:48 PM
Macneil: but libertarians don't say "I guess there's nothing we can do". They say instead "There's nothing we can force people to do which will help when all is considered" And if you don't consider everything, then you ARE NOT an economist. You're not even a bad economist; you're simply no kind of economist at all.
Posted by: Russell Nelson at Sep 11, 2005 2:38:54 PM
No one for Romer and his growth theory?
Posted by: Mr. Econotarian at Sep 11, 2005 2:50:14 PM
"There simply *aren't* good reasons for not helping the poor."
I think the objectivist's would have plenty to argue with you there.
However, I'm a bit concerned that someone would think that a libertarian would not want to help the poor. Any compassionate person wants the poor to do better. A libertarian is someone who doesn't think that the government is the best vehicle through which to accomplish this goal.
Posted by: Barfy at Sep 11, 2005 3:05:58 PM
"And if you don't consider everything, then you ARE NOT an economist. You're not even a bad economist; you're simply no kind of economist at all."
That seems like a very strong sentence. mind elaborating?
Posted by: Dave Collins at Sep 11, 2005 3:14:35 PM
So is the "Krugman is not an economist" critique really saying "Krugman doesn't consider everything"? I would agree that someone who doesn't consider everything is not acting like an economist.
That does sound like a better reason to support the "Krugman isn't an economist" claim instead of the alternative "because Krugman isn't a libertarian" argument.
A lot of people have referenced Arnold Kling's "C verus M argument" article. I can't see how that's a biting criticism of Krugman at all. *Of course* it's enlightening to reveal motivations ("M"s) people have, as a way of explaining what they do.
As for the libertarians... sure, there's lots of arguments that convincingly show the harms of big government. But it doesn't really seem harmful to me that people would get school vouchers, or progressive healthcare vouchers, or other forms of government coersion. See the article I mentioned before, and search for the paragraph that begins "To put it bluntly, the genre is a failure."
Posted by: Macneil at Sep 11, 2005 5:00:54 PM
Dave: if you are trying to figure out why people took one action versus another, and you leave something significant out, your answer cannot be correct. If you make a practice of doing that (not that I'm pointing fingers at anyone), then you're not really doing an economic analysis. Economists can make mistkaes and leave thins out; that just makes them poor economists (if they always do it). The difference between an economist and a non-economist is that the economist is *trying* to analyze everything. A non-economist doesn't realize the necessity.
Macneil: yes, I realize that libertarian ideas have not caught on. If more people understood economics, more people would be libertarians (which is, yes, an assertion that an understanding of economics leads to an appreciation of "shutting up and letting people decide for themselves": the essence of libertarianism).
I think that if somebody thinks they can decide things for other people, they do not understand economics. If you understand economics, then you are humble and modest. Of course, that would explain why there are so few economists in elected office.
Also, libertarianism has a philosophical problem in that the better a libertarian you are, the less likely it is that you will seek to control other people. The Libertarian Party is at best an effort to do the least bad possible, and who would vote for that? You're more likely to be successful in preventing the most bad by voting for the least bad major party candidate.
Posted by: Russell Nelson at Sep 11, 2005 5:53:01 PM
Russell: I think economics actually implies a softer-lined libertarianism.
For example, economics, and not libertarianism, reveals the freerider problem. National defense and science research are both "slam dunk" cases for taxing people and spending those funds for those purposes. A lot of work on string theory might not lead to anything. Thus, the industry isn't going to invest much in it. Private interests would support some string theory, of course. Government isn't the only place to turn to. But underfunding of research is a classic market failure.
As for education, I think forcing everyone to pay for it is acceptable. Is it deciding things for others? Sure it is; it taxes them. But it's providing a worthwhile public good. I would agree that vouchers are the way to go for education.
Anyway, the more I studied economics, the more libertarian-leaning I became. The LP itself is a total disaster, and third parties are dead in our voting system anyway. But I can't even apply that label to myself, even forgetting it's baggage connotations, given that I think, well, we should probably give progressive health care vouchers and negative taxes to the poor.
Posted by: Macneil at Sep 11, 2005 6:46:26 PM
Well, they seem to like to match'em up by field so I'd go with the Tag Teams of Krugman/Bhagwati or Romer/Barro. Nothing against Krugman, and only adulations to Bhagwati, but I'm cheering for the growth guys, just because that's where my own preferences (and how I rank fields in terms of importance lies) - and there hasn't been a 'growth' Nobel yet. Actually you could stretch it a bit and do all four since Krugman and Bhagwati have done some growth stuff and Barro's done some international finance stuff. On the other hand, Bhagwati's been around way longer then the others - Krugman took his classes - so he deserves it more for that reason. Same thing with Schelling and Fama.
But I haven't had much success in predicting the winners in the past; usually I got my picks and then when the announcement is made I slap my forehead and say 'of course, those guys make perfect sense'.
Posted by: radek at Sep 12, 2005 3:57:45 AM
You'll notice that Krugman isn't arguing for a return to the welfare state, nor does he argue for soak-the-rich levels of taxation, nor for any of those other ideas that we know economically don't work in practice.
It's true that Krugman has never explicitly said these things. But since he argues for massive tax hikes, and since the poor don't have massive amounts of money, the only logical conclusion is that he favors soak-the-rich levels of taxation.
Krugman has argued that the federal government should tax at rates at which it will receive 28% of the GDP. That would involve drastic tax increases.
Posted by: David Nieporent at Sep 12, 2005 4:11:20 AM
"..and there hasn't been a 'growth' Nobel yet."
How about Simon Kuznets, Robert Lucas and Robert Solow..
Posted by: Bjørnar at Sep 12, 2005 8:35:04 AM
My (corp fin/contract theory) teacher suggested Holmström. Dark horse?
Posted by: Johan at Sep 12, 2005 1:45:24 PM
They just gave one for macro with a ratex orientation. So Barro looks very unlikely this year, even if he is clearly on the "A list." Rumor has it that a Tullock-Krueger combo is very likely for rent seeking, but may have to wait for Krueger to get out of her high profile IMF position first. That one kills several birds with one stone. Schelling would be great, and I think he is back on the A-list, but maybe not this year. Romer is clearly A-list also, but I suspect is a few years off still.
I would have to give the edge to Bhagwati, probably with Dixit, who did not share it with Stiglitz, and maybe someone else, but probably not Krugman, although one cannot rule him out this year. There has not been one for a long time for trade, and Bhagwati is clearly the heavy there.
Regarding Krugman, I really think the Nobel committee will not be all worked up about either his political views or his editorial writing for NY Times. So what? His problem is that he has been given credit for things that he did not originate, and from the sources I have the Nobel committee knows it, or at least some people who were on the committee in the not-too-distant past knew it (the commmittee has turnover, and I am not sure who is on it now other than Jurgen Weibull, the evolutionary game theorist who was the main advocate for John Nash receiving it). Much press has been expended giving credit to Krugman for both the "new international trade" (presumably the basis for putting him in there with Bhagwati and Dixit) and the "new economic geography." However, he clearly did not invent the first, and also did not invent the second. He publicized both of them and grabbed a lot of limelight, but as I said, I think the committee knows (or did know) the facts in this matter. If he gets it, and I think he is on the B-list if not the A-list, it will be for his long ago work on foreign exchange rates. It has been a few years since the last prize was given for that, but trade has been much longer ago than forex. Dixit invented the model Krugman applied, and several others, including Elhanan Helpmann and Brander and Spencer, did so before Krugman got on the "new international trade theory" bandwagon, although it is possible he invented that term.
I also would not rule out Baumol, who would certainly be deserving. He is probably ahead of Barro and Romer and Krugman, if not Bhagwati et al, and maybe even Schelling or Tullock-Krueger.
Posted by: Barkley Rosser at Sep 12, 2005 4:39:31 PM
Bjornar,
Well to me it's not a 'growth Nobel' until a 'team' gets it. Harsanyi, Selten and Nash is a 'game theory Nobel', 'Granger and Engle' was an 'Econometrics nobel'. There's gotta be a theme there - when it goes to single guys like Lucas, Kuznets , or Solow they're too prolific of researchers for it to be really called a 'growth Nobel'. I mean in those cases you could just as well call'em the 'Rational Expectations Nobel', the 'National Income Accounts Nobel' and the 'Efficiency Wages Nobel' (or pick some other area).
Posted by: radek at Sep 12, 2005 7:33:55 PM
Simon Kuznets
"for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development"
Robert Solow
"for his contributions to the theory of economic growth"
The quotations above are from www.nobel.se
Posted by: Jim at Sep 12, 2005 8:14:05 PM
Going with the Holmstrom idea, what about a triple for theory of the firm: Hart, Holmstrom and Williamson?
Posted by: Rob at Oct 4, 2005 1:08:34 AM
