Particle physics experiments

Canadian David Card shares Nobel Prize in economics for natural experiments


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Earnings for work using experiences that draw on real-life situations to revolutionize empirical research

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Three US academics won the 2021 Nobel Prize in Economics for their work using experiments that draw on real-life situations to revolutionize empirical research.

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David Card from the University of California at Berkeley, Joshua D. Angrist from the Massachusetts Institute of Technology and Guido W. Imbens from Stanford University will share the Sveriges Riksbank Prize in Economics in memory of Alfred Nobel, responsible for the Royal Swedish Academy of Sciences. announced Monday in Stockholm.

David Card was born in Guelph, Ontario, educated at Queen’s University in Kingston, Ontario, and remains a Canadian citizen.

“This year’s economics laureates have demonstrated that it is possible to answer many of society’s big questions,” the academy said on Twitter. “Their solution is to use natural experiences – real-life situations that look like random experiences. “

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Angrist and Imbens specialized in the development of such a methodology, while Card used this approach to address key issues of labor economics.

Examples of research cited by the academy include its analysis of the influx of Cubans into Miami’s labor market in the 1980s after the country’s leader, Fidel Castro, allowed citizens who wanted to leave the island to do it.

Another study mentioned was Card’s article with Alan Krueger, the late economist and former adviser to President Barack Obama, which compared the effects of minimum wage policies at fast food outlets in Pennsylvania and New Jersey.

Card acknowledged the contributions of Krueger, who died in 2019.

“I’m sure if Alan was still with us he would have shared this award with me,” he said at a press conference hosted by the University of California at Berkeley.

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Card said their work was initially greeted with skepticism, but ultimately swayed the field to embrace “the idea of ​​looking for these crucial events, or things that happened, that could potentially enlighten our theorization and our understanding of the world “.

He also said the concept that employers have more leeway in setting wages than previously thought has taken off.

Imbens, speaking on Bloomberg Television, also highlighted Krueger’s contributions alongside the winners’ work.

Asked about the role data certainty plays in economic forecasting, he said it was something he wondered about a lot.

“Traditionally, we have certainly made a mistake in placing too much trust in models,” said Imbens. “So a lot of the methods that I have developed have tried to move away from it and try to make those methods more robust.”

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The professor did not hear the phone ring when contacted in the early hours of his morning in California to tell him he had won the award.

“I missed the first call – I got the second,” he said. “I slept well. I did not expect that.

The work of the laureates focuses on the concrete applications of the discipline of economics in recent years. 2020 winners Paul Milgrom and Robert B. Wilson of Stanford invented new auction formats used in mobile phone frequencies, while researchers whose work ranged from inequalities to climate change were among other beneficiaries. earlier this century.

Prize money

The winners of the Saving Prize will split a sum of 10 million crowns ($ 1.1 million), with Card receiving half and the other two receiving the remainder.

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Monday’s announcement means 89 men have now won in this category. The Economics Prize has a particularly poor record in honoring women compared to other older Nobel Prize winners, and had never done so until Elinor Ostrom won in 2009. In 2019, Esther Duflo became the second female recipient.

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The peace prize awarded to journalists Maria Ressa and Dmitry Muratov on Friday is the only one this year to have been awarded to a woman.

Alfred Nobel, the Swedish inventor of dynamite who died in 1896, bequeathed much of his fortune for the creation of the annual prizes in physics, chemistry, medicine, peace and literature.

The central bank of Sweden added the economics award in 1968. William Nordhaus, Paul Krugman, Amartya Sen and Milton Friedman are among the best known recipients of this award.

Bloomberg.com

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