Natural Experiments Revolutionize Empirical Research
In a groundbreaking achievement, three U.S.-based academics have been awarded the 2021 Nobel Prize in Economics for their pioneering work using natural experiments to revolutionize empirical research. David Card at the University of California Berkeley, Joshua D. Angrist of the Massachusetts Institute of Technology, and Guido W. Imbens at Stanford University will share the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
A Breakthrough in Empirical Research
The Royal Swedish Academy of Sciences announced the winners on Monday, emphasizing that their work demonstrates the potential for natural experiments to answer many of society’s big questions. Angrist and Imbens have specialized in developing methods to analyze natural experiments, while Card has used these techniques to explore various economic phenomena.
The Power of Natural Experiments
Natural experiments occur when a random event or circumstance is replicated multiple times, allowing researchers to observe the effects of different scenarios without directly manipulating them. By harnessing this power, Angrist, Imbens, and Card have made significant contributions to our understanding of economics.
A Tribute to Alan Krueger
The winners were joined by a special tribute to their late colleague, Alan Krueger. Card praised Krueger’s work, saying that if he were still with them, he would be sharing this prize. The three winners acknowledged the influence of Krueger’s research on their own work.
Imbens’ Thoughts on Certainty and Data
Speaking on Bloomberg Television, Imbens highlighted the importance of robust methods in economic forecasting. He expressed concerns about putting too much faith in models, emphasizing that his work aims to make methods more reliable.
The Prize Money and the Legacy
The winners will share award money of 10 million kronor ($1.1 million), with Card receiving half of it. This achievement marks a milestone for the economics prize, which has had a poor record of honoring women compared to other Nobel awards.
A Lagging Indicator of Climate Change?
As the world celebrates this achievement, some experts argue that the Nobel Prize is a lagging indicator of climate change. Despite its significance, the prize has faced criticism for its slow recognition of pressing global issues.
The Legacy of Alfred Nobel and His Bequest
Alfred Nobel, the Swedish inventor of dynamite, left much of his fortune to create the annual prizes in physics, chemistry, medicine, peace, literature, and economics. Sweden’s central bank added the prize for economics in 1968, recognizing its importance in shaping global understanding.
Join the Discussion: What Do You Think About This Achievement?
Please share your thoughts on this achievement and its implications for our understanding of economics.
