Nobel Prize-Winning Contributions to Economics

Course description: Since it was first awarded in 1969 to Ragnar Frisch and Jan Tinbergen, dozens of scholars have won the Nobel Memorial Prize in Economic Sciences. In this course, we will survey the discipline of economics through the lens of these scholars’ prize-winning contributions and their more recent applications. In doing so, we will explore the building blocks on which today’s economics stands, and will learn a great deal of intellectual history. Along the way, we will see how Nobel prize-winning contributions help explain the world around us, and will ask questions such as: Why are some countries rich, while others are poor? Should you be allowed to sell your kidney? Why do some countries impose very restrictive immigration policies? Is there such a thing as ‘involuntary unemployment’? Can money buy happiness Why do smokers find it so hard to quit? Is foreign aid politically motivated? How should medical school graduates be matched to residency programs? When does it make sense for several countries to use the same currency? Does a country’s political system determine its economic performance? When should the government allow two large companies to merge, and when should it prevent such mergers? Are you correct to suspect that your judgment might be hopelessly out of whack? and many, many others.

Note: This syllabus stems from an undergraduate seminar that I taught in the Department of Economics at Harvard University between 2013 and 2016. I figured it would be a pity to let it die, so I have decided to post it online. I will be regularly updating the syllabus to reflect the most recent Nobel Prizes in Economics. Latest update: 6 July 2019

Introduction: Sveriges Riksbank Prize in Economic Science in Memory of Alfred Nobel

• Browse the Nobel Prize website.
• Browse the John Bates Clark Medal website.
• Lindbeck, Assar (1985). “The Prize in Economic Science in Memory of Alfred Nobel,” Journal of Economic Literature, 23, 37-56.
• Gans, Joshua S. and George B. Shepherd. (1994). “How Are the Mighty Fallen: Rejected Classic Articles by Leading Economists,” Journal of Economic Perspectives, 8:1, 165-179.
• Borjas, George and Kirk Doran. (2015). “Prizes and Productivity: How Winning the Fields Medal Affects Scientific Output,” Journal of Human Resources, 50:3, 728-758.

The Scope of Economics

1992: Gary S. Becker “for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including non-market behavior”

• Becker, Gary S. (1993). “Nobel Lecture: The Economic Way of Looking at Behavior,” Journal of Political Economy, 101:3, 385-409.
• Fisman, Raymond, Sheena S. Iyengar, Emir Kamenica and Itamar Simonson. (2008). “Racial Preferences in Dating,” Review of Economic Studies, 75, 117-132.
• Avery, Christopher N., Mark E. Glickman, Caroline M. Hoxby and Andrew Metrick. (2013). “A Revealed Preference Ranking of U.S. Colleges and Universities,” Quarterly Journal of Economics, 128:1, 425-467.

Ethics, Values and Economics

1974: Gunnar Myrdal and Friedrich August von Hayek “for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena”

• Hayek, Friedrich A. (1945). “The Use of Knowledge in Society,” American Economic Review, 35:4, 519-530
• Falk, Armin and Nora Szech. (2013). “Morals and Markets,” Science, 340, 707-711.
• Sandel, Michael J. (2012). “What Isn’t for Sale?” The Atlantic Monthly, April 2012.
• Leonard, Thomas C. (2004). “The Price is Wrong: Causes and Consequences of Ethical Restraint of Trade,” Journal des Economistes et des Etudes Humaines, 14:2, Article 8.

Economic History

1993: Robert W. Fogel and Douglass C. North “for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change”

• North, Douglass C. (1994). “Economic Performance Through Time,” American Economic Review, 84:3, 359-368.
• Eichengreen, Barry. (1994). “The Contributions of Robert W. Fogel to Economics and Economic History,” Scandinavian Journal of Economics, 96:2, 167-179.
• Goldin, Claudia. (1995). "Cliometrics and the Nobel," Journal of Economic Perspectives, 9:2, 191-208.
• Nunn, Nathan. (2009). “The Importance of History for Economic Development,” Annual Review of Economics, 1, 65-92.

Transaction Costs and Property Rights

1991: Ronald H. Coase “for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy”

2009: Elinor Ostrom “for her analysis of economic governance, especially the commons” and Oliver E. Williamson “for his analysis of economic governance, especially the boundaries of the firm”

• Coase, Ronald H. (1960). “The Problem of Social Cost,” Journal of Law and Economics, 3:1, 1-44.
• Williamson, Oliver E. (1979). “Transaction-Cost Economics: The Governance of Contractual Relations,” Journal of Law and Economics, 22:2, 233-261.
• Ostrom, Elinor. (2000). “Collective Action and the Evolution of Social Norms,” Journal of Economic Perspectives, 14:3, 137-158.

Asymmetric Information

2001: George A. Akerlof, A. Michael Spence, Joseph E. Stiglitz “for their analyses of markets with asymmetric information”

• Krueger, Alan B. (2000). “Economic Scene: Children smart enough to get into elite schools may not need to bother,” New York Times, 27 April 2000.
• Akerlof, George A. (1970). “The Market for Lemons: Quality Uncertainty and the Market Mechanism,” Quarterly Journal of Economics, 84, 485-500.
• Weiss, Andrew (1995). “Human Capital vs. Signalling Explanations of Wages,” Journal of Economic Perspectives, 9:4, 133-154.
• Stiglitz, Joseph E. (2002). “Information and the Change in the Paradigm in Economics,” American Economic Review, 92:3, 460-501.

Incomplete Contracts and Principal-Agent Problem

2016: Oliver Hart and Bengt Holmström "for their contributions to contract theory"

• Hart, Oliver. (2017). "Incomplete Contracts and Control," American Economic Review, 107:7, 1731-1752.
• Holmström, Bengt. (2017). "Pay for Performance and Beyond." (Nobel lecture)
• Sappington, David. (1991). "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives, 5:2, 45-66.
• Murphy, Kevin J. (2012). "Executive Compensation: Where We Are, and How We Got There."

Game Theory: Nash Equilibrium, Bayesian Games, and Sub-Game Perfection

1994: John C. Harsanyi, John F. Nash Jr., and Reinhard Selten “for their pioneering analysis of equilibria in the theory of non-cooperative games”

• Gibbons, Robert. (1997). “An Introduction to Applicable Game Theory,” Journal of Economic Perspectives, 11:1, 127-149.
• Nash, John F. (1950). “Equilibrium Points in n-Person Games,” Proceedings of the National Academy of Sciences of the United States of America, 36:1, 48-49.
• Holt, Charles A. and Alvin E. Roth. (2004). “The Nash Equilibrium: A Perspective,” Proceedings of the National Academy of Sciences of the United States of America, 101:12, 3999-4002.
• Dixit, Avinash. (2005). “Restoring Fun to Game Theory,” Journal of Economic Education, 36:3, 205-219.

Game Theory: Commitment and Repeated Games

2005: Robert J. Aumann, Thomas C. Schelling "for having enhanced our understanding of conflict and cooperation through game-theory analysis"

• Ivaldi, Marc, Bruno Jullien, Patrick Rey, Paul Seabright and Jean Tirole. (2003). “The Economics of Tacit Collusion,” Final Report for DG Competition, European Commission.
• Schelling, Thomas C. (1969). “Models of Segregation,” American Economic Review, 59:2, 488-493.
• Hart, Vi and Nicky Case. (2014). “Parable of the Polygons: A Playable Post on the Shape of Society” [online game]

Industrial Organization and Regulation

1982: George J. Stigler “for his seminal studies of industrial structures, functioning of markets and causes and effects of public regulation”

2014: Jean Tirole “for his analysis of market power and regulation”

• Royal Swedish Academy of Sciences. (2014). “Market Power and Regulation.”
• U.S. Department of Justice and the Federal Trade Commission (FTC). (2010). “Horizontal Merger Guidelines.”
• Stigler, George J. (1971). “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science, 2:1, 3-21.
• Tirole, Jean. (1994). “The Internal Organization of Government,” Oxford Economic Papers, 46, 1-29.

Mechanism and Market Design

2007: Leonid Hurwitz, Eric S. Maskin, Roger B. Myerson “for having laid the foundations of mechanism design theory”

2012: Alvin E. Roth and Lloyd S. Shapley “for the theory of stable allocations and the practice of market design”

• Royal Swedish Academy of Sciences. (2007). “Asymmetric Information and Economic Institutions.”
• Royal Swedish Academy of Sciences. (2012). “Stable Matching: Theory, Evidence, and Practical Design.”
• Tullis, Tracy. (2014). “How Game Theory Helped Improve New York City’s High School Application Process,” New York Times, 5 December 2014.
• Gale, David and Lloyd Shapley. (1962). “College Admissions and the Stability of Marriage,” American Mathematical Monthly, 69:1, 9-15.
• Roth, Alvin E. (2007). “The Art of Designing Markets,” Harvard Business Review.
• Roth, Alvin E., Tayfun Sönmez and M. Utku Ünver (2004). “Kidney Exchange,” Quarterly Journal of Economics, 119:2, 457-488.

Labor Markets with Search Costs

2010: Peter A. Diamond, Dale T. Mortensen, and Christopher A. Pissarides “for their analysis of markets with search frictions”

• Royal Swedish Academy of Sciences. (2005):.“Markets with Search Costs.”
• Holzer, Harry J. and Marek Hlavac. (2014). “A Very Uneven Road: U.S. Labor Markets in the Past 30 Years,” In: Diversity and Disparities: America Enters a New Century, John Logan (Ed.), New York: Russell Sage Foundation, 23-59.
• Mortensen, Dale T. (1988). “Matching: Finding a Partner for Life or Otherwise,” American Journal of Sociology, 94, 240-215.

Microeconometrics

2000: James J. Heckman "for his development of theory and methods for analyzing selective samples," and Daniel L. McFadden "for his development of theory and methods for analyzing discrete choice"

• Levitt, Steven D. (2006). "Honoring James Heckman's Contributions to Economics: Identification, Heterogeneity, and Economic Models," Law & Social Inquiry, 27:1, 35-40
• Manski, Charles F. (2001). "Daniel McFadden and the Econometric Analysis of Discrete Choices," Scandinavian Journal of Economics, 103:2, 217-229.
• Angrist, Joshua D. and Jörn-Steffen Pischke. (2010). “The Credibility Revolution in Empirical Economics: How Better Research Design is Taking the Con out of Econometrics,” Journal of Economic Perspectives, 24:2, 3-30.
• Kennedy, Peter E. (2002). “Sinning in the Basement: What Are the Rules? The Ten Commandments of Applied Econometrics,” Journal of Economic Surveys, 16:4, 569-589.

Financial Markets: Efficient Market Hypothesis and Asset Pricing

2013: Eugene F. Fama, Lars Peter Hansen, and Robert J. Shiller “for their empirical analysis of asset prices”

• Malkiel, Burton G. (2003). “The Efficient Market Hypothesis and Its Critics,” Journal of Economic Perspectives, 17:1, 59-82.
• Macaskill, William. (2015). “Does Divestment Work?” The New Yorker, October 2015.
• Shiller, Robert J. (2003). “From Efficient Markets Theory to Behavioral Finance,” Journal of Economic Perspectives, 17:1, 83-104.
• Case, Karl E. and Robert J. Shiller (2003). “Is There a Bubble in the Housing Market?” Brookings Papers on Economic Activity, 17:1, 299-362.
• Fama, Eugene F. and Kenneth R. French. (2004). “The Capital Asset Pricing Model: Theory and Evidence,” Journal of Economic Perspectives, 18:3, 25-46

Financial Markets: Portfolio Theory and Financial Derivatives

1985: Franco Modigliani “for his pioneering analyses of saving and of financial markets”

1990: Harry M. Markowitz, Merton H. Miller, and William F. Sharpe “for their pioneering work in the theory of financial economics”

1997: Robert C. Merton, Myron S. Scholes “for a new method to determine the value of derivatives”

• Greenwood, Robin and David Scharfstein. (2013). “The Growth of Finance, ”Journal of Economic Perspectives, 27:2, 3-28
• Fabozzi, Frank J., Francis Gupta, and Harry M. Markowitz. (2002). “The Legacy of Modern Portfolio Theory,” Journal of Investing, 11:3, 7-22.
• Hall, Brian J., and Kevin J. Murphy. (2003). “The Trouble with Stock Options,” Journal of Economic Perspectives, 17:3, 49-70.
• Jarrow, Robert A. (1999). “In Honor of the Nobel Laureates Robert C. Merton and Myron S. Scholes: A Partial Differential Equation That Changed the World,” Journal of Economic Perspectives, 13:4, 229-248.

Economic Growth and Income Inequality

1971: Simon Kuznets “for his empirically founded interpretation of economic growth which has led to a new and deepened insight into the economic and social structure and process of development”

1987: Robert M. Solow “for his contributions to the theory of economic growth”

2018: Paul Romer "for integrating technological innovations into long-run macroeconomic analysis"

• Mankiw, Gregory, David Romer and David N. Weil. (1992). “A Contribution to the Empirics of Economic Growth,” Quarterly Journal of Economics, 107:2, 407-437.
• Kuznets, Simon. (1955). “Economic Growth and Income Inequality,” American Economic Review, 45:1, 1-28
• Romer, Paul. (199). "The Origins of Endogenous Growth," Journal of Economic Perspectives, 8:1, 3-22
• Krueger, Anne O. (1995). “East Asian Experience and Endogenous Growth Theory,” In: Growth Theories in Light of the East Asian Experience, Eds. Takatoshi Ito and Anne O. Krueger, University of Chicago Press, 9-36.
• Hellebrandt, Tomáš and Paolo Mauro. (2015). “The Future of Worldwide Income Distribution,” Peterson Institute for International Economics, Working Paper 15-7.

International Economics: Currencies and Exchange Rates

1999: Robert A. Mundell “for his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas”

• Advanced background from the Royal Swedish Academy of Sciences.
• Fischer, Stanley (2001). “Exchange Rate Regimes: Is the Bipolar View Correct?” Journal of Economic Perspectives, 15:2, 3-24.
• Eichengreen, Barry (2010). “The Breakup of the Euro Area.” In: Alberto Alesina and Francesco Giavazzi, Europe and the Euro.

International Economics: Trade and Geography

2008: Paul R. Krugman “for his analysis of trade patterns and location of economic activity”

• Royal Swedish Academy of Sciences. (2008). “International Trade and Geography - Information for the Public."
• Krugman, Paul R. (2009). “The Increasing Returns Revolution in Trade and Geography,” American Economic Review, 99:3, 561-571.
• Mayda, Anna Maria. (2006). “Who is against immigration? A cross-country investigation of individual attitudes toward immigrants,” Review of Economics and Statistics, 88:3, 510-530.

Keynesian Macroeconomics

1970: Paul A. Samuelson “for the scientific work through which he has developed static and dynamic economic theory and actively contributed to raising the level of analysis in economic science”

1972: John R. Hicks [shared with Kenneth J. Arrow] “for their pioneering contributions to general economic equilibrium theory and welfare theory”

• Hicks, J. R. (1937). “Mr. Keynes and the ‘Classics’: A Suggested Interpretation,” Econometrics, 147-159.
• Blinder, Alan S. (1988). “The Fall and Rise of Keynesian Economics,” Economic Record, 278-294.
• Blinder, Alan S. and Mark Zandi. (2010). “How the Great Recession Was Brought to an End”

The Phillips Curve: Is There a Trade-Off Between Inflation and Unemployment?

1976: Milton Friedman “for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy”

2006: Edmund S. Phelps “for his analysis of intertemporal tradeoffs in macroeconomic policy”

• Taylor, John B. (1999). “A Historical Analysis of Monetary Policy Rules,” In: Monetary Policy Rules, John B. Taylor (Ed.), University of Chicago Press, 319-347.
• Kuttner, Kenneth N., and Adam S. Posen. (2010). “Do Markets Care Who Chairs the Central Bank?”, Journal of Money, Credit and Banking, 42, 2-3, 347-371.
• Alesina, Alberto, and Lawrence H. Summers. (1993). “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence”, Journal of Money, Credit and Banking, 25:2, 151-162.

Macroeconomics: Rational Expectations

1995: Robert E. Lucas, Jr. “for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economy policy”

2004: Finn E. Kydland and Edward C. Prescott “for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles”

2011: Thomas J. Sargent and Christopher A. Sims “for their empirical research on cause and effect in the macroeconomy”

• Prescott, Edward C. “Why Do Americans Work So Much More Than Europeans?”, Federal Reserve Bank of Minneapolis Quarterly Review, 28:1, 2-13.
• Woodford, Michael. (1999). “Revolution and Evolution in Twentieth-Century Macroeconomics,” Princeton University, June 1999.
• Mankiw, N. Gregory. (1989). “Real Business Cycles: A New Keynesian Perspective,” Journal of Economic Perspectives, 3:3, 79-90.

Social Choice and Welfare Economics

1972: John R. Hicks and Kenneth J. Arrow “for their pioneering contributions to general economic equilibrium theory and welfare theory”

1998: Amartya Sen “for his contributions to welfare economics”

2015: Angus Deaton “for his analysis of consumption, poverty, and welfare”

2018: William D. Nordhaus "for integrating climate change into long-run macroeconomic analysis"

• Sen, Amartya. (1999). “The Possibility of Social Choice,” American Economic Review, 89:3, 349-378.
• Cutler, David, Angus Deaton and Adriana Lleras-Muney. (2006). “The Determinants of Mortality,” Journal of Economic Perspectives, 20:3, 97-120.
• Kahneman, Daniel and Angus Deaton. (2010). “High income improves evaluation of life but not emotional well-being,” Proceedings of the National Academy of Sciences, 107:38, 16489-16493.
• Nordhaus, William D. (1991). "To Slow or Not to Slow: The Economics of the Greenhouse Effect," The Economic Journal, 101:407, 920-937.

Public Choice and Political Economy

1986: James M. Buchanan, Jr. “for his development of the contractual and constitutional bases for the theory of economic and political decision-making”

• Buchanan, James M, Jr. (1987). “The Constitution of Economic Policy,” American Economic Review, 77:3, 243-250.
• Persson, Torsten and Guido Tabellini. (2004). “Constitutions and Economic Policy,” Journal of Economic Perspectives, 18:1, 75-98.
• Faye, Michael and Paul Niehaus. (2012). “Political Aid Cycles,” American Economic Review, 102:7, 3516-30.

Experimental Economics

2002: Vernon L. Smith [shared with Daniel Kahneman] “for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”

• Smith, Vernon L. (1991). “Rational Choice: The Contrast Between Economics and Psychology,” Journal of Political Economy, 99:4, 877-897.
• Camerer, Colin, George Loewenstein and Drazen Prelec. (2005). “Neuroeconomics: How Neuroscience Can Inform Economics,” Journal of Economic Literature, 43, 9-64.

Behavioral Economics

1978: Herbert A. Simon “for his pioneering research into the decision-making process within economic organizations”

2002: Daniel Kahneman [shared with Vernon L. Smith] “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty”

2017: Richard Thaler "for his contributions to behavioural economics"

• Simon, Herbert A. (1991). “Organizations and Markets,” Journal of Economic Perspectives, 5:2, 25-44.
• Rabin, Matthew. (1998). “Psychology and Economics,” Journal of Economic Literature, 36, 11-46.
• Thaler, Richard H. (2000). “From Homo Economicus to Homo Sapiens,” Journal of Economic Perspectives, 14:1, 133-141.

About the author: Marek Hlavac teaches economics at UWC Adriatic, an international secondary school in Duino, Italy. He is also a microeconomics instructor in the Summer Program of the Mid-Career Master in Public Administration program at the Harvard Kennedy School. He holds a bachelor's degree in Economics, summa cum laude, from Princeton University, a Master in Public Policy degree from Georgetown University, and a Ph.D. in Political Economy from Harvard University. His personal website is [here].