Bank of Sweden Prize in Economics in Memory of Alfred Nobel

Article

October 28, 2021

The Bank of Sweden Prize in Economics in Memory of Alfred Nobel, commonly known as the "Nobel Prize in Economics", is a distinction which each year rewards one or more people for their outstanding contribution in the field of economics. It was created and endowed by the Bank of Sweden in 1968, on the occasion of its 300th anniversary, and first awarded in 1969. It is the only prize managed by the Nobel Foundation that was not created by Alfred Nobel's will. It nevertheless follows the same rules as the Nobel Prizes, and is also awarded by the King of Sweden on December 10. Like the physics and chemistry prizes, it is awarded by the Royal Swedish Academy of Sciences. The monetary endowment of the prize in 2018 amounts to nine million Swedish kronor, or approximately nine hundred thousand euros.

Origin

The idea for a new “Nobel Prize” comes from Per Åsbrink, Governor of the Bank of Sweden, one of the oldest central banks in the world. As part of the preparation for the Bank's tricentenary, he created a research foundation, the Bank of Sweden Jubilee Foundation, and offered his economic advisor, Assar Lindbeck, as well as economists Erik Lundberg (fr) and Gunnar Myrdal, to think about developing a price. The Bank then contacted the Nobel Foundation, and the Royal Swedish Academy of Sciences, which was already responsible for awarding the prizes in physics and chemistry. Some members of the Academy have reservations about the sufficiently scientific aspect of economics, but Lundberg and especially Myrdal (who are also members) end up convincing the entire Academy. In May 1968, the central bank, the Nobel Foundation and the Academy agreed on the rules for awarding the prize, and the office of the Central Bank decided to officially found it. These rules were codified by the Swedish government in January 1969 [ref. necessary]. The first committee is composed of Bertil Ohlin (chairman of the committee, Stockholm School of Economics), Erik Lundberg from the Stockholm School of Economics, Ingvar Svennilson from the University of Stockholm, Herman Wold from the University of Uppsala and Gothenburg University, and Assar Lindbeck from Stockholm University. Since then, the prize is commonly nicknamed "Nobel Prize in economics" while Alfred Nobel said he had "no training in economics and [hate] it from the bottom of his heart". For Avner Offer and Gabriel Söderberg, economic historians, Per Åsbrink, supported by the business community, opposed the social democratic government which intended to use credit to promote employment and housing, and rather advocated moving towards the fight against inflation. According to these authors, the creation of the prize enabled it to generate media interest and thus increase its influence to the detriment of social democratic ideas.

Awarding of the prize

Choice of laureates

The process for selecting the winner and the amount of the prize awarded is the same as for Nobel Prizes. Each year, the Royal Swedish Academy of Sciences invites qualified personalities to submit their nominations. These persons include members of the Academy of Sciences, members of the award selection committee, past laureates, tenured professors in relevant subjects, in Sweden, as well as in Denmark, Finland, Iceland, and Norway, professors holding corresponding chairs in at least six universities chosen each year by the Academy as well as other researchers invited by the Academy. Two to three hundred nominations are sent, which correspond to a hundred distinct candidates. The applications are then evaluated by a committee of cin

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