Wednesday, July 29, 2009

Professor French's Nobel Prize odds

Many have suggested (including Dean Slaughter just this past spring) that professor French may someday end up with The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (the economic Nobel Prize). This is more than just Tuck marketing. Each time a short list of possibilities comes out before the award, Professor French is listed. This is due to his work on asset pricing that he has done with Eugene Fama. Last year, the two were running first and second odds-wise by the British betting firm Labrokes

However, I think there is now a snag. The current backlash against financial economics is not trivial and it is very clear to me that the award is often presented in a "faddish" way. Econ blogosphere is awash with financial economics critics. Felix Salmon, Dani Rodrik, Seeking Alpha, and most vocally Nassim Taleb are all critics of the innovations in financial theory and instruments from the past...lets call it 50 years.

Given the politicization of the award (why would you give the award to Hayek and Myrdal in he same year unless it was for political reasons?), I predict that we will have some non-finance awards for several years. Growth, Trade, Behavioral, and (boringly) Labor economics are probably all that will be on the table for legitimate consideration.

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