The September 3rd edition of the WSJ has an article (subscription required) that reports the answers of several Nobel economists to a variety of questions. One question was "What single breakthrough in economic thought in the past 50 years has had the most significant impact on the everyday lives of people, and why?" This is what they came up with:
George A. Akerlof: The use of game theory. It allows economists to analyze problems in greater detail, and thus yields a better correspondence between the situation and the theory.
Kenneth J. Arrow: I don't exactly know what a "single breakthrough" is. I would rather say that the idea of modeling the implications of alternative policies, made possible by theoretical development, the revolution in computing, and the increased volume of data, has had a salutary effect on policy. The use of models does not necessarily lead to good policies, but it does avoid the worst possibilities.
Milton Friedman: Acceptance of the idea that inflation is a monetary phenomenon. Why? Because it has produced by now more than two decades of relatively low inflation in most developed countries, relatively stable economic output, a high level of employment and of well-being.
Clive W.J. Granger: The ability to control inflation.
Lawrence R. Klein: It is no surprise that Jan Tinbergen was awarded the first economic prize (shared). His work on econometric model building was completed far ahead of its time, with few resources of the sort that are used today. He formulated the principles of economic policy formation and laid the groundwork for implementation through econometric inference. Also, his early (second) model built for the League of Nations had many insightful ideas about income distribution, the wealth effect, and wage determination. Models stemming from his breakthrough of the 1930s are used over and over again throughout the world.
Harry M. Markowitz: I'd say portfolio theory, but I'm biased.
John F. Nash Jr.: I don't know what to choose for that; it can take rather longer than 50 years for a good economic theory to become fully effective.
William F. Sharpe: Tie: Friedman's monetary theory and Keynes's macroeconomic theory (strange bedfellows, to be sure).
Vernon L. Smith: Hayek's theme, on the utilization of knowledge, that the dispersed information required to organize an economy cannot be given to any one mind; that command and control systems must therefore fail; and this theme brought down or forced liberalization of the Chilean, Soviet, Eastern European, Chinese, etc. central control of their economies.
Robert M. Solow: Not sure. Possibly our improved understanding of international trade, exchange rates, and open-economy macroeconomics. (Large numbers affected.)
related items:
Friedrich August von Hayek's speech at the Nobel Banquet, December 10, 1974
via Cafe Hayek, EconLog
George A. Akerlof: The use of game theory. It allows economists to analyze problems in greater detail, and thus yields a better correspondence between the situation and the theory.
Kenneth J. Arrow: I don't exactly know what a "single breakthrough" is. I would rather say that the idea of modeling the implications of alternative policies, made possible by theoretical development, the revolution in computing, and the increased volume of data, has had a salutary effect on policy. The use of models does not necessarily lead to good policies, but it does avoid the worst possibilities.
Milton Friedman: Acceptance of the idea that inflation is a monetary phenomenon. Why? Because it has produced by now more than two decades of relatively low inflation in most developed countries, relatively stable economic output, a high level of employment and of well-being.
Clive W.J. Granger: The ability to control inflation.
Lawrence R. Klein: It is no surprise that Jan Tinbergen was awarded the first economic prize (shared). His work on econometric model building was completed far ahead of its time, with few resources of the sort that are used today. He formulated the principles of economic policy formation and laid the groundwork for implementation through econometric inference. Also, his early (second) model built for the League of Nations had many insightful ideas about income distribution, the wealth effect, and wage determination. Models stemming from his breakthrough of the 1930s are used over and over again throughout the world.
Harry M. Markowitz: I'd say portfolio theory, but I'm biased.
John F. Nash Jr.: I don't know what to choose for that; it can take rather longer than 50 years for a good economic theory to become fully effective.
William F. Sharpe: Tie: Friedman's monetary theory and Keynes's macroeconomic theory (strange bedfellows, to be sure).
Vernon L. Smith: Hayek's theme, on the utilization of knowledge, that the dispersed information required to organize an economy cannot be given to any one mind; that command and control systems must therefore fail; and this theme brought down or forced liberalization of the Chilean, Soviet, Eastern European, Chinese, etc. central control of their economies.
Robert M. Solow: Not sure. Possibly our improved understanding of international trade, exchange rates, and open-economy macroeconomics. (Large numbers affected.)
related items:
Friedrich August von Hayek's speech at the Nobel Banquet, December 10, 1974
via Cafe Hayek, EconLog
Mahalanobis - am 2004-09-08 03:03 - Rubrik: economics
