Friday, October 5, 2007

People Will Bet on Anything

including the Nobel Prize* in Economics, which will be announced Monday, Oct. 15. According to Ladbrokes, the favorites are:

Christopher Pissarides (4:1 odds)
Dale Mortensen (4:1)
Paul Krugman (5:1)
Peter Diamond (5:1)
Paul Romer (6:1)
Elhanan Helpman (8:1)
Gene Grossman (8:1)
Robert Barro (8:1)

Presumably Mortensen and Pissarides would receive the award jointly, mainly for their work on unemployment theory (if they win, someone might recall the copy of Pissarides' "Equilibrium Unemployment Theory" I have checked out from the library....). I'm pulling for Krugman, if only because we are studying his seminal "Increasing Returns, Monopolistic Competition and International Trade" paper in Econ 441 ("see, I told you it was important!"). Romer is one of the pioneers of endogenous growth theory - some of which relies on the same imperfect competition/scale economies mechanism used by Krugman (for an excellent account of Romer's contribution, see David Warsh's book "Knowledge and the Wealth of Nations"). The device they both use (and everyone uses now) - is the "Dixit Stiglitz" technology - Stiglitz already has a Nobel (can't get it twice), and the odds on Dixit are 20:1. Grossman and Helpman have both done important work (much of it together) in both growth and trade theory.

*The prize was established "in memory of Alfred Nobel" by the Swedish central bank in 1968, so its technically not a "real" Nobel Prize (if you look carefully at the Nobel Prize web site, you'll notice its referred to as the "Prize in Economics" not "Nobel Prize in Economics")

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