Three economists have been awarded the Nobel Prize for their use of real-life experience as a research tool to understand the causal factors of how change in monetary policy affects them.
The Royal Swedish Academy of Sciences on Monday announced the names of David Card and Joshua de Angrist and Guido W. Imbens as this year’s Nobel laureates in economics.
These three economists have resorted to ‘natural experiments’ in their research, where real life experiences are used to understand the effects of a situation.
David Card, a professor of economics at the University of California, Berkeley, showed in his research how the decision to raise the minimum wage in New Jersey in the United States had a positive effect on the job market.
Raising salaries will reduce job opportunities – many of those who believed in this simple idea have been forced to change their minds after researching the card.
Professor Card will receive half of the 10 million kroner for this year’s Nobel Prize for his role in the study of labor economics.
The other half will be shared by Joshua de Angrist, a professor at the Massachusetts Institute of Technology (MIT) and Guido Imbens of Stanford University.
They are receiving the award for their systematic development of analysis on ‘casual relationships’.
Paul R. Milgram and Robert B. Wilson, professors from the United States, were awarded the Nobel Prize in Economics last year for developing the theory of auctions and inventing new methods for determining the market value of financial assets.
As always, this year’s Nobel season began on October 4 with the announcement of the award of the Department of Medicine. The Nobel Prizes in Physics, Chemistry, Literature and Peace were announced in the next four days.
The winners will be awarded on December 10, the anniversary of Alfred Nobel’s death.