Update: The prize has been announced. Read reactions from Kellogg School and Northwestern University economics faculty.
The 2011 Nobel Prize in Economics will be announced Monday, and this year also marks the third anniversary of the Kellogg School of Management/ Northwestern University poll. I asked faculty from the Kellogg School and Northwestern University’s economics department to select their favorites for the prestigious prize. Sixty people responded this year.
Jean Tirole—a darling of this poll in previous years—again jumped to the front of the pack. Tirole is a professor at the Industrial Economic Institute in Toulouse, France, where his work focuses on game theory and industrial organization. He has also written books on financial regulation and financial crises, which may be part of the reason he continues to rise to the top in this poll.
Paul Romer, who finished in the top five in last year’s Kellogg School/Northwestern University poll, came in second this time around. Romer is a senior fellow at the Stanford Institute for Economic Policy Research, and his research centers on how technological change affects economies, specifically shifts in worker productivity. Considering how steadily productivity has risen in past decades, he seems a fitting choice.
One respondent voiced their support for Romer: “I think for another year the committee will avoid anything overtly political, or anything that celebrates unrestrained financial markets. Economic growth is my forecast for this year. It is one of the topics for the moment. So Romer is a natural. Who will be paired with him? Harder to call.”
Douglas W. Diamond, a professor at the University of Chicago, rounds out the top three. Diamond co-developed a model with Philip H. Dybvig which simulates bank runs in financial crises. Last year, associate professor of finance Josh Rauh had this to say about Diamond: “While Diamond first developed these theories in the 1980s, the recent financial crisis shows that they are completely applicable even in the more complex financial system that has evolved. In the 2008 crisis, the repo market played served the same function as the deposits, and the mortgage-backed securities were the long-term assets on bank balance sheets.”
Diamond and fourth-place finisher Jerry A. Hausman are the only predictions on the Thompson-Reuters list that fared well in the 2011 Kellogg School/Northwestern University poll.
More generally, the three professors expected the Nobel to be awarded to someone specializing in econometrics. Other predictions included game theory, development, contract economics, financial economics, and marketing. On that last one, one respondent commented, “Economists neglect such forces as advertising, sales force, sales promotion and other tools in affecting shifts in demand and supply. Their model of buyer behavior is primitive (rational man) at a time when behavioral economics is coming into vogue.”