Nobel Prize in Economics

Article

October 20, 2021

The Nobel Prize in Economics, officially the Bank of Sweden Prize for Economic Sciences in memory of Alfred Nobel (in Swedish Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), has been awarded since 1969, following the institution by of the Sveriges Riksbank (which in that year celebrated the 300th anniversary of its foundation), of a special endowment fund for the awarding of the prize. This award was not foreseen in Alfred Nobel's will, but is managed by the Nobel Foundation and delivered together with the other prizes. The nomination process begins about a year before the award is presented, with the Royal Swedish Academy of Sciences inviting qualified individuals and organizations to suggest deserving candidates. A commission of 5-8 scholars invites experts, both Swedish and foreign, to draw up a study on the candidates deemed most deserving. The commission then draws up a report to the Royal Academy of Sciences which decides by final vote at the beginning of October each year. The announcement is made after notifying the winning candidate. The award ceremony takes place in December. Information on applications and the selection process is kept secret for 50 years.

Origin

The idea for a new “Nobel Prize” comes from Per Åsbrink, governor of c, one of the oldest central banks in the world. As part of the preparations for the Bank's tricentennial, he created a research foundation, the Jubilee Foundation Bank of Sweden, and offered his economic advisor, Assar Lindbeck, as well as economists Erik Lundberg 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 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 whole Academy. In May 1968, the central bank, the Nobel Foundation and the Academy agreed on the rules for awarding the prize and the central bank office then decided to officially found it. These rules are codified by the Swedish government in January 1969. The first committee is composed of Bertil Ohlin (chairman of the committee, Stockholm School of Economics), Erik Lundberg of the Stockholm School of Economics, Ingvar Svennilson of Stockholm University, Herman Wold of Uppsala University and of Gothenburg University and Assar Lindbeck of the University of Stockholm. Since then, the award has commonly been dubbed the "Nobel Prize in Economics", although Alfred Nobel said he had "no background in economics and [hate] from the bottom of his heart." Per 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 instead advocated moving towards the fight against inflation. According to these authors, the creation of the award allowed it to generate interest from the media and thus to increase its influence at the expense of social democratic ideas.

Criticism

The prestige of the prize derives in large part from the association with the prizes created by the will of Alfred Nobel, a choice that has often been the cause of criticism. Among the most notable is the position of the Swedish lawyer and human rights activist Peter Nobel, great-grandson of Alfred Nobel, who considers the prize a mere "public relations blow between economists to improve their reputation." Gunnar Myrdal of Sweden, and former Swedish finance minister Kjell-Olof Feldt, spoke out in favor of abolishing the premium. In Feldt's case, however, the objection was well founded

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