Nobel economics prize: time for a focus on finance?
STOCKHOLM (Reuters) - The Nobel Prize panel is not known for being topical when it chooses the winner of its award in economics -- but this year might be different.
As turmoil convulses world financial markets, some Nobel watchers say there is a chance the award could go to an economist, or a team, that sheds light on issues behind the storm.
They say historical trends point to the award, due to be announced on October 13, going to someone who specializes in finance, for the first time in more than a decade.
"If the heads of banks had listened a bit more to what research in finance was showing, maybe some of today's serious problems could have been avoided," said Professor Hubert Fromlet of the Jonkoping International Business School.
The last time the prize recognized work on finance, he noted, was in 1997, when it went to Myron Scholes and Robert Merton for work on derivatives.
Fromlet, whose forecasts for the award have often been accurate in the past, said another possibility was that the award committee's choice would be for inter-disciplinary research, such as work combining psychology and economics.
"Psychology is an important science in economic contexts -- how consumers, investors and financial markets behave," he said.
"The current financial market crisis of course has fundamental reasons but the exacerbation also has to do with psychological exaggerations."
Last year the economics prize went to Leonid Hurwicz, Eric Maskin and Roger Myerson for work that laid the foundations of a theory that determines which market-based systems work best.
NO RUSH TO JUDGMENT
Economic awards tend to recognize work done years or even decades before.
"The committee doesn't want to fall for an ideological fashion craze, nor award what 10 years later may have been shown to be rash conclusions," Fromlet said.
He reckoned the work that earns this year's prize would probably have taken place in the 1970s or 1980s.
Analysis by Thomson Reuters Corp (TRI.TO) points to Lars Hansen of the University of Chicago, Thomas Sargent at New York University and Princeton University's Christopher Sims as potential winners, for advances in econometrics.
The Thomson Reuters analysis makes use of the way scientists credit one another for their work to find out who has done the most influential research in the fields of physics, chemistry, medicine and economics. Continued...
