Tuesday, October 12, 2010

Puzzling Over the Nobel

As an outsider, albeit an interested outsider, I'm still looking for a backstory in the award of the Economics Nobel to three guys who have developed some elegant but not-that-all-easy-to-explain models on “markets with search frictions,” or, as I suspect the press would prefer to term it, "structural unemployment."  Although I won't pretend to have made a comprehensive search, I don't recall hearing any buzz about these guys earlier, while commentators seemed to be restricting their focus more to treehouse celebrities like Eugene Fama.  So why who and now?

Some commentators are noting that Diamond was earlier rejected as "unqualified" for  seat on the Federl Reserve Board--"that for you, Richard Shelby!"  This seems unlikely; I suspect there is a good chance that the recommenders have no more than the foggiest idea who Richard Shelby is, and aren't really focused on this kind of political gamesmanship (contrast, e.g., their neighbors on the "real Nobel" and their work on, e.g., the Peace prize or the prize for literature).

But here's a different kind of "political" motive, spun out of a thread from my own gizzard.  Specifically: nothing in economics looks more beat-up and plug-ugly these days than "formal macro"--predicting, e.g., when economies will collapse and what to do to bring them to recovery.  Could it be that the Nobelists went looking for a respectable macro person--and, failing that, moved next door to a field that outsiders might mistske for macro, where reputations are more stable?

Okay, just sayin'.  Meanwhile, another Nobel thought: I lately heard a right-wing chatterer say that we needn't take Krugman's Nobel seriously because "his Nobel is not in Economics in general, but in a narrow area." I'll try to restrain myself as to the general silliness of the remark, but I found myself wondering--how many Nobels are for "economics in general," rather than "a narrow area"? Skimming old citations--I suppose you could say that recipients like Samuelson and Arrow got their prizes for "economics in general"--but in the sense that their technical work transformed the whole field. The 1976 Milton Friedman citation strikes me as a masterpiece of equivocation, seeking to honor his work as free-agent publicist, while keeping its purity as respectably scientific:
...for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy.
 Um, okay I guess, though you would never guess whom you were talking about from this characterization.  But would I be right to say that more recent prizes have almost all been for what my chatterer calls "a narrow area"--in the sense that the low-hanging fruit has mostly been picked, and we are left with ever more arcane particulars?

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