Recently the Nobel Prize in Economics has been announced for the inventors of natural experiments.
This year’s Nobel Prize in Economics will be awarded to three economists David Card, Joshua D Angrist and Guido W Imbens. The award will be given to him for pioneering the use of natural experiments to understand causal effects of economic policy and other issues.
- Natural experiments use real-life situations to find out the effects on the world. It is an approach that has extended to other areas and has revolutionized empirical research.
- The Committee awarded one half of the prize to David Card for his empirical contributions to labour economics.
- His studies from the early 1990s challenged conventional wisdom and showed that raising the minimum wage does not result in fewer jobs.
- The other half jointly to Joshua D. Angrist and Guido W. Imbens for their methodological contributions to the analysis of causal relationships.
- From the first Nobel Prize in the year 1901 to the year 1988, this award was originally given in only 5 categories.
- The Nobel Prize in Economics was instituted much later in the year 1968. The first Nobel Prize in Economics was awarded in 1969 by the Royal Swedish Academy of Sciences.
- The prize was established in memory of Alfred Nobel on a donation made by Sweden’s central bank, Sveriges Riksbank.
Source – The Hindu
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