Nobel Prize in economics goes to ‘natural experiments’ pioneers

US economists David Card, Joshua Angrist and Guido Imbens win the 2021 Nobel Prize in economics.

Economists David Card, Joshua Angrist and Guido Imbens have received the 2021 Nobel Prize in economics for pioneering the usage of “natural experiments” to know the causal results of financial coverage and different occasions.

Natural experiments use real-life conditions to work out results on the world, an approach that has unfold to different fields and revolutionised empirical analysis.

One such experiment by Canada-born economist Card on a minimal wage enhance within the US state of New Jersey within the early 1990s prompted researchers to assessment their view that such will increase ought to at all times result in falls in employment.

“Natural experiments are everywhere,” Eva Mörk, a member of the Prize Committee for the Alfred Nobel Memorial Prize in Economic Sciences, instructed a information convention of the impact the strategy has had throughout all of the social sciences.

Past Nobel economics prizes have been dominated by US institutes and this was no exception.

Card presently works on the University of California, Berkeley; Angrist at Massachusetts Institute of Technology, Cambridge and Dutch-born Imbens at Stanford University.

“I was just absolutely stunned to get a telephone call, then I was just absolutely thrilled to hear the news,” Imbens mentioned on a name with reporters in Stockholm, including he was thrilled to share the prize with two of his good pals. Angrist was greatest man at his wedding ceremony.

The prize, formally generally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final of this 12 months’s crop of Nobels and sees the winners share a sum of 10 million Swedish crowns ($1.14m).

Empirical contributions

Card took half the prize “for his empirical contributions to labour economics”, the academy mentioned.

Angrist and Imbens shared the opposite half “for their methodological contributions to the analysis of causal relationships”.

The prestigious prizes for achievements in science, literature and peace have been created and funded within the will of Swedish dynamite inventor and rich businessman Alfred Nobel.

They have been awarded since 1901, although the economics prize – created by means of a donation from Sweden’s central financial institution on its 300th anniversary – is a later addition that was first handed out in 1969.

While the economics award has tended to reside within the shadow of the usually already well-known winners of the prizes for peace and literature, laureates over time embody quite a few massively influential economists, such because the Austrian-British Friedrich August von Hayek and American Milton Friedman.

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