Answers: Economics and the Nobel Prize
Ben Bernanke, who headed the U.S. Federal Reserve during the 2008 global financial crisis was awarded the Nobel Prize for economics in October along with Douglas Diamond and Philip Dybvig. They were honoured for their work on the role of banks during financial crises and the importance of avoiding bank collapses.
This quiz on Nobel laureates in economics presented an opportunity to remind myself of the five years I spent studying the ‘dismal science’.
Answers
1) A 1983 paper on bank runs played a crucial role in the Nobel award for Ben Bernanke. What was the real-life consequence of the bank collapses in Bernanke’s study?
The Great Depression of the 1930s. More here, here and here.
2) This Nobel laureate’s best-known book was published in 1944 and sold enough copies in the UK and the U.S. to be classified as a minor hit. But it was the publication of a condensed version in The Reader’s Digest in 1945 that massively expanded the reach of the book and its ideas. The author’s first promotional lecture in New York drew an overflow crowd and was broadcast over the radio. Name the author and the book.
Friedrich Hayek, The Road to Serfdom (1974 Nobel). More here, here and here. You can read the condensed version of The Road to Serfdom published by the Reader’s Digest here.
3) The Carnegie Corporation of New York chose a Swedish economist to lead a comprehensive study of race relations in the U.S. A 1,500-page-long book was published in 1944. The book was a reference point for the civil rights movement and was mentioned in a key Supreme Court ruling. Martin Luther King Jr. used the book’s title in the charter of the Southern Christian Leadership Conference. Name the book and the author (he shared the Economics Nobel with the author in the previous question)
Gunnar Myrdal, An American Dilemma (1974 Nobel). More here, here, here and here. The U.S. Supreme Court cited the book in its landmark Brown v. Board of Education ruling desegregating schools in 1954. More about Brown v. Board of Education and the notorious ‘separate but equal’ ruling of 1896 in my earlier quiz on the U.S. Supreme Court here.
A major contributor to An American Dilemma was Ralph Bunche, who went on to be a prominent official at the United Nations and became the first Black Nobel Prize recipient (peace) in 1950. More here.
Alva Myrdal, Swedish politician, diplomat, sociologist and Gunnar Myrdal’s wife received the Nobel Peace Prize in 1982 for promoting nuclear disarmament. Gunnar Myrdal joined Alva in India in 1957 when she was named Sweden’s ambassador and that set the stage for his book Asian Drama. India was a major theme and he coined the term ‘soft state’, arguing that governments in South Asia are unable or unwilling to institute ‘fundamental reforms and enforce social discipline’. He added that there is ‘little hope in South Asia for rapid development without greater social discipline’.
4) Which Nobel laureate for economics, the first from his country, was given his name soon after birth by another Nobel laureate?
Amartya Sen (1998 Nobel), the first economics Nobel laureate from India. Sen was named by Rabindranath Tagore, the first non-white recipient of the Nobel Prize (Literature, 1913). More about Tagore in my earlier quiz here on Poets and the Nobel Prize.
5) A biopic of which economics Nobel awardee won four Oscar prizes including best film and best director?
John Forbes Nash Jr, the mathematician who has honoured with the Economics Nobel in 1994 for his work on game theory. The Oscar-winning film was A Beautiful Mind.
6) This Nobel laureate presented the TV series Free to Choose on PBS in the U.S. in 1980, making him a household name in the country. Who?
Milton Friedman (1976 Nobel). More on Free to Choose here. Friedman is a pivotal figure in the free-market oriented Chicago school of economics. He was an adviser to Barry Goldwater’s failed Republican campaign in 1964. He cited ‘free-market principles’ to oppose the Civil Rights Bill that passed the same year, arguing that the market will override economic inefficiencies caused by racism. More on his views here and here. Later he opposed sanctions against white-minority ruled Rhodesia in the 1970s. You can read his explanation here.
Friedman had his biggest intellectual impact in the 1980s as adviser to Ronald Reagan and Margaret Thatcher. More here, here and here.
7) This country hired a bunch of economists trained by the Nobel laureate in the previous question after a military coup in 1973. The economists known as the ‘Chicago Boys’ embarked on a growth-focused privatisation strategy, which has had mixed results and is partly blamed for current problems. Which country?
Chile after the 1973 military coup led by General Pinochet. More here, here and here. Chile’s market-oriented model has been credited for rapid economic growth. It became the first South American country to join the OECD group of high-income economies in 2010. But the policies have been blamed for worsening inequality. Student protests demanding cheaper education expanded to mass demonstrations against inequality in 2019. Student protest leader turned politician Gabriel Boric was elected as Chile’s youngest president in 2021.
More on Milton Friedman and Chile here and the protests against him in the U.S. that followed his 1975 Chile visit here.
8) Inflation and unemployment are largely considered by economists as moving in opposite directions. In a recession, as demand falls, inflation is low while unemployment is high. A boom tends to be accompanied by rising prices and low unemployment. The economic consensus was turned on its head in the 1970s. What term popularised by Nobel laureate Paul Samuelson signified a combination of high inflation and high unemployment?
Stagflation. More here. More about Paul Samuelson (1970 Nobel) here and here. More here and here on the rivalry between Samuelson and Milton Friedman.
9) What was unique about the mathematician and economist Leonid Kantorovich who was awarded the Nobel Prize in 1975?
The only Nobel Economics laureate from Communist Soviet Union. More here and here.
10) The 2002 economics Nobel winner Daniel Kahneman was honoured for his work on judgment and decision-making. His first book Thinking, Fast and Slow was a bestseller. But he is not a trained economist. What is his academic field?
Psychology. More here, here, here, here and here.
11) Elinor Ostrom, the political scientist who was the first woman recipient of the Economics Nobel studied how communities such as cattle herders in Switzerland and forest dwellers in Japan preserved shared resources such as pasture, trees and water. Her research debunked the premise of a widely cited article from 1968. What was the title of that article?
The Tragedy of the Commons by Garrett Hardin. He posited that humans on their own would compete selfishly to use a common resource until it runs out. Recent critiques here and here.
More about Elinor Ostrom (2009 Nobel) here, here and here.
12) What was formulated by Nobel laureate Simon Kuznets as a tool to analyse the long-term economic trends of industrialised nations in the 1930s? As chief statistician at the War Production Board during World War II, he used his formulation to set production targets for both the military and civilian sectors of the U.S. economy.
National Income Accounting. More here. This paved the way for the calculation of GDP (Gross Domestic Product). More on Simon Kuznets here. Kuznets was born in what is now Belarus and studied in Kharkov (now Kharkiv in Ukraine) before emigrating to the U.S. Kharkiv, which held out against relentless Russian shelling earlier this year is home to the Simon Kuznets Kharkiv National University of Economics.
13) W. Arthur Lewis from the Caribbean island of Saint Lucia was the first Black person to be awarded the Nobel prize in economics. In 1952 he was invited by the leader of a British colony’s independence movement to write a report on industrialisation. In 1957 the newly-independent country brought him on board as chief economic adviser. He lasted only 15 months and left amid differences with the political leader. Which country?
Ghana. More here, here and here. The political leader was Kwame Nkrumah, a pan-African icon who led Ghana to independence, making it the first country in Africa south of the Sahara to shake off colonial rule.