Tuesday, October 7, 2014

How the Nobel Prize Committee in Economics Chooses Recipients and Why Israel Kirzner is Unlikely to Get It This Year

An EPJ reader emails:
I sent a link to your story on an Austrian School economist being nominated for the Nobel Prize to an acquaintance of mine who is a well known in academic circles in Europe. We just happened to have forged a friendly acquaintance on their yearly visits to the U.S.

This acquaintance states that many, especially American, “predictors” of the next prize think it is based on personal qualifications. It is, but only in a second step. What is true is that the committee (the economics one), first decides upon a field that deserves the prize, and second, decides on who are the most important for that field gaining momentum. That is why it often are several winners of one prize. This said, the question is if entrepreneurship [which is what Kirzner would receive the Nobel for] is the next field to be rewarded. It is my sources opinion that it is not, but it is likely to be in five years or so….

Lastly, he states that the number of citations is not everything. Another famous economist from the US, Robert Barro, is one of the most cited and is always on the public lists, but it is doubtful he will ever get the prize according to the above. Not being influential enough. And in a field that has received many prizes already without sharing him.

To be on the safe side, the committee also makes surprising choices. Last year Eugene Fama got the prize, an economist who still states there is no such thing as a financial bubble.

My source says they like that it is often a surprise who the yearly winner is, although the list of potential winners is not very long.

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