October 10, 2001
STOCKHOLM -- The Nobel prize for economics was given to Americans George A. Akerlof, A. Michael Spence and Joseph E. Stiglitz for advances in analyzing markets and the control of information.
The laureates laid the foundation in the 1970s for a general theory about how the control of information influences a wide range of markets for everything from used-car sales to the boom in technology stocks during the 1990s.
Research into "asymmetric information" gave economists a way to measure the risks, for example, faced by a lender who lacked information about a borrower's creditworthiness. The research also explored how investors with inside knowledge of a company's financial prospects gain an edge over others, while those who don't fully understand may invest unwisely.
Their contributions "form the core of modern information economics," the Royal Swedish Academy of Sciences said in a written announcement.
Mr. Akerlof, 61 years old, of the University of California, Berkeley; Mr. Spence, 58, of Stanford University; and Mr. Stiglitz, 58, of Columbia University will share the $943,000 award.
Mr. Stiglitz, who had been chief economist at the World Bank, said in an interview Wednesday that the Sept. 11 terrorist attacks tipped the U.S. into recession. But he believes President Bush's tax cuts are "too much." The cuts aren't working as a stimulus, he said, and now the country is going back to the deficits it experienced a decade ago.
The [Nobel] prizes, which include awards for physiology or medicine, physics, chemistry, literature and peace, were established in the will of Alfred Nobel, the Swedish industrialist and inventor of dynamite. The prizes were first awarded in 1901. The economics prize [formally as the Nobel Memorial Prize for Economic Sciences] was established separately in 1968 by the Swedish central bank, but it is grouped with the other awards.
Last year's economics prize was won by Americans James J. Heckman and
Daniel L. McFadden for their work in developing theories to help analyze
labor data, and how people make work and travel decisions.
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