Econ Nobel Predictions, Missed Chances, and Questionable Winners

Good afternoon, Tyler.

Good afternoon, Alex.

So today we're going to be talking about the Nobel Prize in Economics. Who will win? Who should win? Who didn't win? Who should have won?

And all the more.

Yeah.

Which of those questions do you want to start with? How about who's going to win this year or soon?

Yeah. So let's talk about the gossip. Who do you think will win? I think it will be next week, right?

I believe so. I don't have a clear pick. Most years I do. But the picks are harder each time. So one option is Michael Woodford for monetary theory. Since many nations have beat back inflation, it's not a terrible year for Woodford to be the winner. Another pick probably won't happen this year, but Susan Athey for introducing machine learning to economics in addition to other contributions.

That would be two in the Athey family.

That's correct. Two almost, you know, in close connection. But I do think she will get it for that. Those would be two of my picks. But again, I'm really not sure on the timing.

Yeah, I think Adi is too early, but definitely a possibility. She is married to Guido Imbens, if you don't know, who won the Nobel Prize very recently.

That was two years ago. Is that right?

Something like that.

Two or three. Yeah.

Yeah. My guess is an IO prize, industrial organization, maybe Paix, maybe with—

Paix is a good prediction. Maybe that's the most likely. Single winner.

Yeah. So Pakes has this model with Barry and Levinson, the BLP model.

Right.

It's not my favorite thing.

It's not intuitive. It's hard to teach. I don't understand it myself.

Yeah.

Can I vote for Susan?

Exactly.

But he probably deserves it.

He probably deserves it.

In some way, right?

Exactly. I mean, the essence of the model is that We have very good models if you want to understand pricing in a monopoly, and we know pricing in perfect competition, oligopolistic markets, especially when you have differentiated products. Like you think about the auto market, right? And you've got gas, electric, hybrid, two-seater, four-seater, luxury, economy. And what they do is they created a model which is based upon deep characteristics, deep structural parameters, and they're able to show how to estimate that model. Apparently it's pretty useful.

It's an interesting question, which awards will become pretty obsolete because of AI within 5 or 10 years. That's yet another category we could talk about, but at some point it might affect the committee's thinking.

That's true. Yeah, that's true. So technical contributions actually might become less valuable to the extent that AI can produce those fairly easily.

—but there are fewer conceptual contributions to award, I think, also over time.

Yeah, yeah, yeah. Low-hanging fruit.

Someone like Lynn Ostrom, she has her prize, passed away, but there are fewer Lynn Ostroms out there to give the prize to. Yeah. Armen Alshian passed away.

Yeah, it makes our job less interesting because those are the ones I would like to see get the prize. Let's see who else. Asimoglu, possibility?

Bhagwati, I think, is not likely, but I have sympathies in his direction. And I think Richard Posner is not likely. I agree with you. But I have sympathies in his direction. Yeah, yeah. I would give it to Robert Barrow. Okay, okay.

Tell me why you would give it to Robert Barrow.

Our government bonds net wealth as a fundamental way of thinking about fiscal policy remains central. Also, he did early work on political business cycle theory. The status of cross-country growth regressions has fallen greatly. People once thought he might get it for that. That may now even be hurting his chances. But I think overall what he's created and done is enough for a Nobel Prize. Yeah, I agree. He's had 5 or 6 key articles in major macro fields. Yeah, I agree with you.

And I think you're right about the cross-country regressions have fallen in favor over time, but still hugely important and really pushed the profession in that direction for a long time. So, you know, You know, just because it's not fashionable today doesn't mean that it wasn't a major contribution.

But it does mean fewer people will nominate him for fear of looking a bit low status, like, oh, you still think cross-country growth regressions are the thing. Yeah, I think it matters how many people nominate you in the early rounds.

Yeah, I think, I think it's Barrow's birthday this week. Like, he's 80, I think. Okay. Yeah, he's getting on. I agree with you about Richard Posner. He is in fact long overdue.

He has serious health problems now. So yes, whether that's a factor in the selections, I don't know, but I suspect it is. They want someone who can come to the ceremony. Yeah, yeah.

No, I agree. I think it's too late for him, but that will be a tragedy. I mean, he is a giant. He is the most cited legal scholar of all time. I've often said he's the only person who deserves a Nobel Prize— and a seat on the Supreme Court.

Are you sure he's the only one? I'd put Susan Athey on the Supreme Court.

Well, who is plausibly a candidate for the Supreme Court? I mean, he was an incredibly prolific author as well, right?

I mean, prolific can hurt you for Nobel Prize. His single central contribution is a little unclear. I don't think that many economists or former winners will nominate him. And the fact that he built out the whole field is a little amorphous. —like he didn't do the Coase theorem, right? He didn't do what Calabresi did with liability rules. He filled in the boxes, got everyone interested, wrote the textbook. I'm not sure he ever was going to win.

I hear what you're saying. Still, as the giant of law and economics, and as law and economics being really the only kind of major revolution in legal thinking which has gained a foothold in the law schools and held onto it. You know, all this other stuff, critical legal theory, it comes and goes, but law and economics has really gained a foothold.

But having to switch twice back to law and law schools is complicated for his chances, or what would have been his chances. You know who I think should win? I really can't believe I had never thought of this all these years, but Arnold Harberger is 100 years old, still alive. Wow. He has the corporate tax model, which is essential and used for things other than just tax incidents. Harberger triangle, how you think about deadweight loss, distributional weights and cost-benefit analysis. Some major contributions, which I use mentally all the time. He's still going. I met him, I think, 6, 7 years ago. He was then very sharp. I don't know how he's doing, but I would love to see Harberger get the prize. And I feel guilty that I haven't, on Marginal Revolution, been saying it all these years.

Right. So I think Vickrey got the prize and died 3 days later. Yes. So, you know. I guess those are pretty nice 3 days. I'm not sure they are, actually. Does Chile hurt Harberger? People always said it was, you know, the Chicago boys, Friedman. Yeah. Yeah.

So from what I've read, Harberger was not very ideological in Chile. He was insisting on very scientific approaches. People probably don't know that either. Just somehow he's overlooked and people have a sense, well, all the Nobels to Chicago have been given. That is wrong. And yeah, it'd be great.

Yeah, yeah, I agree with you. Speaking of, you know, Harberger and the Harberger triangle and people who are not likely to get it, but, or can't get it now, actually, but brings up, of course, the Tullock rectangle.

Of course, for rent-seeking.

For rent-seeking.

But also Tullock wrote the best and most important parts of Calculus of Consent, which was cited for Buchanan. And the two themselves say in the preface who wrote which part. Yeah, yeah, yeah. That's a tough one to elide.

Yeah, yeah. I think Tullock should have gotten it along with Buchanan. Calculus of Consent clearly is Buchanan's best work, not the only great work that he wrote, but clearly his best work written with Talleck. And I think Talleck should have gotten it as well. This raises an interesting issue about— it's not just your scientific contributions which matter, right? That's right. It's your public presence. It's your public presence. Yeah.

And your students. Yes. And Talleck didn't have many students and his public presence was viewed as ornery. Yes. And he did some things like he gave that address at the Southern Economic Association where he compared, I think, U.S. immigration treatment of Mexicans to South African apartheid, which will get you in trouble even back then. Yes. Yeah. And I think that factors like that matter. Yeah. Yeah.

He didn't have many students. Bill Woolsey was a Tulik student.

Okay. Shigeru Naka. But again, it I feel I would know almost all of them.

There's very few. Buchanan had far more.

That's right. Dick Wagner would be one of the better known ones.

Absolutely. Yeah. Yeah. I mean, Tullock was, yeah, as you said, he was ornery. I think when I got to know him, which was much later in his life, the ornery came off as curmudgeonly. Yes. And I loved him. I loved him for that. You know, I remember one time he asked me for some comments on a paper which he had written. It was a short, short paper. And I gave him some minor comments, even just some grammatical errors. And he took a look and he said, "Surely this will be your greatest contribution to economics." And as I said, I loved it. He was talking with me. I thought that was great. He was fun. But I could imagine for someone who was young earlier on in their career, that could have been a devastating quip.

I recall recruiting Tullock back to George Mason. And I had a conversation with him and he said he would consider going only if I served as his research assistant. And then he just hung up the phone without saying yes or no. Then I knew he was coming. Right. And proceeded to make all plans along those lines. Yeah.

So who else? Who else should win?

Should win looking forward? Yeah. Well, I have an unusual pick. I suspect you'll agree with me, but I would give it to Vitalik Buterin. Tyler Cowen, who actually did something in monetary economics. Yes. Yes. It's amazing to me how much none of the economists that I can think of at all have made any contributions to the theory of crypto. Yeah. Right?

Is there anyone? Not so far. I mean, they're taking a greater interest in it as it has become a bigger share of the economy, but the fundamentals were all from computer scientists.

Vitalik built a platform, created a currency. You could say refuted Mises' regression theorem in the process, obviously following in the footsteps of Satoshi. But my goodness, what does someone have to do to get a Nobel Prize? Absolutely. What's the asset value? Ether, what's the current market cap of Ether? Do you know?

It's hundreds of billions. Yeah, so it's a lot. Yeah, yeah. And I mean, this is applied mechanism design. This is mechanism design in the world. It's both Bitcoin and Ethereum are incredible examples of mechanism design, which I think you would've looked, you would've thought that they were impossible, you know, if you would've thought about it in, in, in advance. And yet they're actually working in the real world. And not only that, but Vitalik has continued to contribute towards the mechanism design of Ethereum by going to Proof of Stake, changing Ethereum.

That's right. That worked. In fact, I was like, how are they going to do this?

It's fine. Yeah. I think you ever seen those videos of these guys in Saudi Arabia where they change the car tires while the car is moving? You know? Right. I mean, that's, that's what Ethereum did. I mean, it incredibly, they changed from proof of work to proof of stake while the machine kept running.

And he writes on monetary economics. And there's no economist who has anything better to say on the topics he writes on. And that to me is worth a lot in this consideration.

Yeah, yeah, that's very true.

And he's super polite, you know, would bow to the king or whatever is required. He'd be wonderful at the ceremony. Like, there's no issues there at all. Yeah, he's given a lot to charity.

Yeah, I was just going to say he gave hundreds of millions of dollars. Not dollars, dollar value. Well, yes, please. Eventually, I assume somewhere along the line fine, it turned into dollars. Yes, I agree with that. Yes, he has been, uh, very charitable. And yeah, also as someone in general who thinks deeply about, uh, economic issues and mechanisms in the world, you know. Yeah, I agree. Satoshi, of course, should have gotten it as well, but I said I'm sure he's dead, you know.

I'm not sure he's dead. I'm pretty sure. I don't think you can give it to someone you cannot identify. It's like Bob Dylan cubed. Like, at least, you know, Bob Dylan's Bob Dylan, right?

Yeah, yeah, yeah. That's very true. So let me give you a less speculative, but so more plausible award, which I hope will come. And that is to the creators of datasets. You know, it's a very odd thing in economics. We should be more appreciative of people who create public goods, right?

That's right. And we're not.

And we're not. Yes. Even an economist, free ride. So I would point to John Haltweinger, Stephen Davis, maybe joined by somebody like Katherine Abraham or Ron Jarmin for JOLTS and the Longitudinal Business Database, the LBD. So let me say a little bit about JOLTS and why that's important. It's the Job Opening Labor Turnover Survey. And you hear every month, the economy has created 400,000 jobs, let's say. You have heard that? Of course. It's not actually true. Right. We know this too. It's not actually true. When you hear that the economy has created 400,000 jobs, it's actually created 5 million jobs. And at the same time, in the same month, 400,600,000 jobs have been destroyed. So that 400,000 figure which you hear, it's a net figure, but it really is just the tip of the iceberg, and it hides all of the dynamism which is going on underneath. Like every single month, millions and millions of jobs are created and millions of jobs are destroyed as people are fired, they quit, they die, they retire, young people entering the workforce. So the US economy, you know, is incredibly dynamic. And that's what we really began to understand with the creation of the JOLTS database.

Another dataset that clearly deserves consideration and deserved a prize was the Penn World Tables with Robert Summers and Alan Heston. So you have real income comparisons across nations and adjusted for purchasing power parity, That's a big deal. We still use all that material. Absolutely. Incredibly important. Hundreds of papers written based upon that dataset.

That's right. And this is the, it's the thing that you go to first when you want to look up, you know, how to really compare countries on purchasing power parity basis. So it's like used every single day.

And this is the Robert Summers, as you know, who's father of Larry Summers, who's great.

Robert Summers, father of Larry Summers and brother to Paul Samuelson. Paul Samuelson.

Yes. And related to Kenneth Arrow and the economist Anita Summers, who is noteworthy in her own right. Absolutely. So.

Quite the family. Yeah. Yeah. If I understand correctly, I think Robert Summers sort of changed his name to Summers cuz he didn't wanna be compared with Paul Samuelson, his brother, so much. But if he'd also won a Nobel Prize, you know.

Out of the frying pan into the fire.

Yeah. So maybe there could have been two Samuelson. It could be Larry Samuelson. Anyway. Yeah, I definitely agree. There should be more attention given to people who create public goods like the Penn World Database. Along the same lines, the Madison Database, which tries to measure GDP going back hundreds of years. The Penn World Database is more for the last, you know, post-World War II. But yeah, both of those databases have been incredibly important. It seems like we ought to be thanking people who create public goods for other people.

That's right. Yeah. And they can use the money. They're typically not that well paid.

That's right. Yeah. Yeah. They don't get the credit they deserve. Yeah. And the census, I think, is important. So, you know, I mentioned, you know, Haldewanger and Stephen Davis and maybe joined, as I said, by somebody at the census like Katherine Abraham. She's a noted economist in her own right, has produced many papers, but she was also a— held many government positions, including serving as Commissioner of the Bureau of Labor Statistics, I think from 1993 through 2001. And she really pushed the creation of the JOLTS database, which I mentioned earlier. So I think there's an opportunity there to say this award is not just for, you know, economists publishing in journals, but for those who are contributing to these underlying tools which economists use all of the time.

Another possible set of awards— is there more in Keynesian economics? Is Malinowski still alive? Does Olivier Blanchard? There could be a packaged macro prize of some sort. Right, right. It was just— That would not shock me. Yeah. Yeah.

I think Mankiw was sort of in discussion for some time, but he hasn't published a lot in recent years.

You know, if Mankiw cost more— I think Woodford is now more likely, but Woodford, Mankiw, again, wouldn't be a shocking thing to do. Just sticky prices, money, prize. Should people who write textbooks get prizes? Yeah, maybe. Talking about public service.

Yeah. I mean, when you look around the world and you think about how many bad economic policies there are, maybe textbooks are actually the biggest service which economists do for the rest of the world.

I hope that's the way that people learn better economic policy ideas. I'm not sure it is. Maybe not. Sometimes it's my view events are what really persuade people, and events may or may not break your way.

Yeah, so we have to go through the high inflation of the '70s to really learn about monetary policy.

And then you read Milton Friedman and it makes a lot of sense.

Yeah, yeah, yeah, yeah. That, that, that could be true. Another person that comes to mind who I think should have won or could have won but didn't win, uh, was William Baumol.

Absolutely. So he has cost disease. Yep. Which is an idea people talk about all the time. All the time.

All the more, in fact, I wrote a book on it.

Given the way prices for some services have gone haywire. So that definitely an omission. Contestable markets is something else. Revenue maximizing theories of the firm, maybe not a big deal, but it shows he had a creative, fertile mind. Yeah. Helped found Economics of the Arts and was just very active in the profession.

Yeah. Economies of scope. Yes. Yeah. Along with contestable markets and especially towards the end of his life, he put a lot of attention on entrepreneurship. Tyler Cowen.

That's right. Those are great pieces. Yeah.

Which I think is incredible to think. But I mean, when you think about economics and you think about economic growth and markets and all of these questions, entrepreneurship is one of the first things which any normal person, person in the street thinks about. That's right. Don't economists— so you would think that economists must be studying entrepreneurship. Isn't that where innovation is coming from?. And yet the economic study of entrepreneurship is almost nil. And he revived interest in that topic.

Another person who clearly should have won was Anthony Downs. Ah, so Economic Theory of Democracy, I think that's 1959. Median Voter Theorem, incentives for voters to be poorly informed. Again, they're ideas we just use all the time. Every day you use these ideas, and he did them. He also did some work on housing policy that was quite good. Not Nobel-level worthy, but it shows he had other arrows in his quiver, so to speak. Yeah, yeah.

So after Economic Theory of Democracy, he didn't do much in political economy, right? Sort of didn't build—

Not that I know of. Yeah. You know, he wrote the— did he write— he wrote a book on bureaucracy. Yeah. Okay. And that was good. Okay. Yeah. Yeah, yeah. So he has some other things, and his main contribution is one of the dozen most important ideas in economics. It is. Yeah, yeah.

He was at Brookings for a very long time. That's right.

Maybe that hurt him. As far as I know, he didn't have students. Right. That may have hurt him. Someone else who died early, I don't think it was an omission as much, but Manker Olsen clearly deserved it.

Oh yes, absolutely.

Yeah, yeah, yeah. And I think he would have won had he simply lived a bit longer. Same with Fisher Black.

Yes, yes. Clearly Fisher Black would have won with Scholes and Merton.

Right. And he was cited in that award. Now Olsen was never cited. But to simply have had like an Olson, Tullock, Downs Award. For sure. There's so much intellectual firepower. Any combination of those is just clearly very deserving. Yeah. Yeah.

Mancur Olson's Rise and Decline of Nations still remains one of my favorite books. That was really critical for me becoming a political economist. I thought just the grand scope of ambition using, you know, microeconomic theory about public goods and the logic of collective action, and then taking that theory and showing it had these huge macro implications for growth, for the rise and decline of nations, as the book title says. I thought that was an amazing achievement.

And the notion that certain kinds of catastrophes can have silver linings. Right. And also 1965, the idea of selective incentives comes from Olson. Right, right. Related to literature on public goods, which you've built upon. Yeah. And if you want to analyze norms in small groups, how they differ in large groups, things Elinor Ostrom did, I mean, you need to build from Olson.

Yeah. Yeah. Yeah. I mean, I guess the lesson there, don't die early.

That's right. It's a good lesson.

Did we mention Altschian already? No, let's talk about Altschian. Armen Altschian.

I think he's deserving, but it's a bit trickier than some of the others. I don't know if there's a single major contribution that puts him over the line. So the evolutionary work, is not that well fleshed out. I'm not even sure how correct it is, but it's very interesting. The general developing price theory approach I value highly, but it was in the form of a text and his oral presence. Right. On money and search, very good articles. To me, they aggregate well above the Nobel Prize level, but again, it's harder than with some people.

But you know, the government destroyed his most important work, right? And they confiscated it and they destroyed his most important work, which might have got him the Nobel. You know this story? I'm sure you do.

But I forget the details. It's during the war, right?

That's correct. So in 1954, you had these atom bomb tests, right? And there was a lot of discussion about what are the critical components which went into making the atom bomb. Okay. And, uh, Alchin went into the basement at Rand and he looked up the stock prices of a bunch of different firms, some of which produced, you know, hydrogen, some of them produce lithium, some of which produce other things. And what he noted was that right following, and even a little bit before the atom bomb test, the stock price of the major firm, which was Castle Bravo, had gone up 48% before, you know, the bomb goes up. And for the year, it was up like by a factor of 4 or 5. So this firm was producing lithium. So Alchian concluded from his stock market analysis that lithium was the key ingredient in the atom bomb. And he started to show this paper around and people freaked out. And, you know, the FBI comes in and they take his paper and they burn it, you know, because he guessed correctly. So this shows a couple of things. So one, this was the first event study. So stock market event studies, right? Yeah. In which you use the reaction of the stock market to announcements, to news, and you see, okay, this is a new antitrust investigation. What happens to the stock market of these firms? Or this kind of thing. This is one of the first event studies and didn't become popular again until 30 years later, really. So he kind of lost out on that. And of course, it has— pretty amazing that information, right, was being leaked, you know, into the stock price. So somebody had to know, hey, we have to buy—

Did the Soviets know?

Yeah, we gotta buy shares in this firm. This is This is gonna be a good pick, right? So somebody was buying up the shares to try and make a killing on the stock market.

So I'd say a prize for Alchian and Dempsetz, even though the Alchian-Dempsetz piece I tend not to think is not so correct. Is the firm about delegated monitoring? It seems to me not. That's just part of contracting. The firm's, whatever else it may be, it's something else.

You prefer the Hart-Grossman model of the firm?

I prefer Julio Rottenberg, you know, he's another premature death, Julio Rottenberg model, which is firms grow bigger when you can buy things cheaply, and it's not necessarily efficient, but you'll take the opportunity to do so. So it's more costly to transact within the firm than not. It's like the opposite of Oliver Williamson. Okay. And I think that's a pretty neat idea that never got enough recognition. Yeah, yeah. And Rottenberg, uh, had a lot of great papers, but just somehow None of them really quite stuck.

Was he one of your teachers?

No, he was at MIT then, I think. Okay. Yeah. Yeah. Not Harvard. Yeah. Never met him. Yeah. Super creative as a mind. Here, is this person still alive? But Joseph Newhouse. So he did the RAND healthcare study. Now they've already given their RCT prizes to Kramer, Duflo, and Banerjee. But the RAND study is very important. Robin Hanson loves the result. Incredible amount of work went behind it. Yeah. Held up in the sense that for the healthcare of that time, it probably was true. Yeah. And he has a, has had a good claim. Yeah.

Health economics in general. Martin Feldstein should have won a prize.

Martin Feldstein should have won. Yes. So for multiple reasons, public finance, tax incidence, empirical public finance, uh, really building up the NBER, uh, economics of the arts. He was actually a figure and he was a big pusher. Of healthcare economics. He said this is the future. At the time, people thought he was crazy. He knew it was headed to basically 20% of GDP. Right, right.

Yeah, Feldstein is a surprise that he didn't win because he was also so connected.

But that one error in the Social Security piece hurt him. And I think being in Reagan's advisor hurt him. Reagan has aged into an even Noah Smith can love him kind of figure.

Right, right.

But For a long time, it's like Reagan was like the evil fascist.

The Trump of the time. Yeah, that's right.

Yeah. And someone who definitely should have won. Yeah. And could have won not two prizes, but he's like well above the one prize line.

Yeah. Yeah. I remember there was Reagan Derangement Syndrome.

I was there for it.

Let's see who else. So Mises. What about Mises?

Well, I think he's deserving, but he dies early enough. They didn't have that much time to give it to him. So there's an optimal sequencing question. This stunned me when I saw it. I was looking through the list. They gave it to Buchanan before Robert Solow. Yeah. Which I don't mind as a good GMUer, but doesn't that surprise you in retrospect? Yeah. Yeah. So they would have had to give it to Mises very early, like before Hayek and some others. And while I think he deserved it, it's not the same kind of omission.

Yeah, yeah, he was already quite old. I think he died '73. Hayek won it in '74.

And you have what, Frisch and Tinbergen winning the first and then Samuelson and Arrow. So that seems fine to me.

Okay, let me ask a tough question, Tyler. Yes. Who won the prize and shouldn't have won it?

Okay, I have some selections here. First, Gunnar Myrdal. It was to counterbalance Hayek. None of the work is held up. No one talks about him. It was bad socialism, second-rate sociology. It's impressive how much he wrote, how much work he did. He was Swedish, but no, Myrdal just should not have won a Nobel Prize. That to me is the clearest case.

Yeah, I agree. His wife also won a Nobel Prize.

Yes, I know, different one.

But yeah, I mean, in retrospect, I agree, they tried, just even imagining that you had to balance out Hayek with Myrdal, you know, I mean, that seems ridiculous now, right? Yeah. I mean, Hayek was clearly deserving and the idea that you had to have some political balance was absurd. And yeah, Myrdal, I think, has certainly, even if you like his work, he has certainly not contributed to the mainstream of economic thinking. He's not cited, he's not created.

—in his best book, 1930, Monetary Equilibrium, is pretty good. But again, it's not what anyone has taken from Myrdal. It's in the Vickselian tradition, and it's somewhat Hayekian, in fact. Someone else I wondered about, I'm not sure I'm negative, but Lawrence Klein, big macro models. Clearly, it's been a major thing. In that sense, he deserves it. But did his model ever outpredict random walk? Right. Like now we have some models that do out-predict random walk by a bit. Did his? I don't know, mixed feelings there. On the grounds of what he did, I clearly can see it. But if we're going to get, you know, persnickety, I'll at least bring up that name. Yeah, yeah. I have one or two others, but do you have any?

Well, maybe Stone, you know, I'm not sure on all the details, you know, he gets it He won for helping to create GDP statistics, especially in Great Britain. And I guess maybe I'm contradicting myself because earlier I said people who produce public goods, they should get it, and people who produce databases and things like that. So maybe on those grounds he deserved it. I'm just not sure.

I have another pick. Tell me what you think. Again, I'm genuinely unsure, but Kantorowicz. He wins very early also. Yes, yes. So I understand the mathematical techniques have been used a lot, but it's bad economics. There's a lot of pure math people you could give it to, like Nash deserves it. It has economic content. Kantorovich, I don't know. I feel if I sat down and chatted economics with him, I'd come away shaking my head.

Yeah, sure. I mean, yeah. Yeah. So it was an interesting direction, um, which they could have gone towards more math. And I think they corrected themselves, um, and thought about it more as a social science, uh, later on. But yeah, if you were gonna give it for math, I mean, operations research, things of that nature, there are other people you could have given it to. Yeah. Yeah. Yeah. No, I think that's, that, that, that's fair though. Though I, he, he deserves it. He deserves something for math. Of course, yeah, absolutely.

Give him some medals. Yeah, yeah, yeah.

But maybe what he really showed was that Mises was right. Correct. After all, he was the key Russian economist, Soviet economist, and the Soviet economy did not do very well. So, yeah, there's a great book on this. You know the book I'm talking about? You mean Red Plenty? Yeah, Red Plenty. Yes, of course, by Red Pliny. Yeah, Red Plenty. Everyone should— It's a fun book. All right, let's, I don't know, maybe we should conclude by satisfying the pedants a little bit and note that we've been talking about the Nobel Prize in Economics, but the official name, right, is the Sveriges Riksbank Prize in Economic Science in Memory of Alfred Nobel, right? So why do we talk about—

most frequently repeated blog comment of all time, right?

Yes, yes, exactly. Yeah. So why do we call it the Nobel Prize in Economics? Because you hate it. That's why. So this raises the question, should there be a Nobel Prize in Economics? Was it a good idea? Has it been good for the economics profession? Hayek thought that there actually shouldn't, right? Even after he won it.

Yeah, overall I've been quite impressed just how good the selections have been. So I'd say it's gone very well and done the world some good. But with growing specialization, I would gladly see the prize wrapped up, say, in 5 years' time. Whoever you think is still out there and deserving, give them their happy day, send them on their way, right? And clear out the bank account. And I think that makes sense because You'll end up with so many winners. And as longevity rises, so many living winners, you'll inflate away some of the value of what you had. It's like an optimal seniorage problem in a way. And I think the committees over time will get more and more small-c conservative. It doesn't have to be bad, but it also makes the prize less valuable. You give it to a lot of super technical people who are definitely defensible picks, but don't change anything. The world hears about them. Nothing happens. I already see this with some cases. Sure. Not complaining about the pick. I was very happy. But like Mortensen and Pissarides and Peter Diamond. Neglected stuff. Very good pick. But no one actually took up those ideas and how they talked about unemployment. In fact, they moved further away from search economics and everything became just the crude sticky nominal wages model. For many years of popular discourse. So that prize was ignored, I would say, by the rest of the world. And I just think that's the future we're looking at. Right.

Now, that has also got to be true for some, for any of the prizes, right? Physics, chemistry, and so forth. You think economics is special or different in this regard, or?

Well, I know much less about those fields, but that Kátalin Kuríko could deserve a Nobel Prize for something really big. It's quite easy for me to see. So I'm not sure the other fields are the same way. Economics to me is more of a closed system than at least some of those fields. When will the first non-human Nobel Prize winner come? Yeah. Yeah. Will they even consider it? Yeah. Well, the winner would be polite at the ceremony, right? So, yes. Too polite. But I think in less than 10 years. Yeah., an AI, it will at least deserve a Nobel Prize in economics. I agree. But not in 3 years.

Yeah. So I think the, if I recall correctly, they did not allow the monkey to get a copyright on its photo, right? That's right. Yes. So that suggests that, uh, we're not quite ready to give an AI, um, a prize. Maybe we would give it to, you know, Sam Altman.

I don't know. Not an economics prize, but someone— we're going to do the Buchanan-Tullock thing again. Like Buchanan deserved it. Tullock deserved it. So it'll be a human working with the AI and we'll give it to the human. Yeah. And who did how much of the work? Right. Maybe we'll never know. Or maybe we will know. Yeah. That's what's going to happen, I think.

So, so somebody will get a Nobel Prize for the right prompt.

So, you know, all you listeners out there, your chance of winning is not as low as you think. Right. Yeah. You don't have to know any economics.

Yeah. Nobel Prize for prompt engineering. I mean, it seems like quite possible. I know my experience with working with the AIs is that there's so much more. You can ask it one question, but if you ask the question in a different way, there's so much more underneath which you can pull out. I mean, it is the depths of the knowledge in there seems to be extremely unexplored. That's right. It's like the— In the Jungian sense.

Yeah, yeah, yeah.

Or the San Andreas Trench or something like that.

That's not what I think the prize will be for though. Right. So there's a number of people, best known to me as Benjamin Manning at MIT, who are working to build AIs that simulate economies. At what scale we will first succeed, you can debate. But obviously simpler problems will come before tougher problems. And I think whoever really does that will deserve a prize and eventually get one.

Okay. Well, I think we've covered the gamut.

Alex, it's been great chatting with you as usual. And when the prize comes, we'll see, right?

Let's see. Let's hope they have a Nobel Prize for economic textbooks. And blogs. And podcasts. Yes. Yes. All right. Very good. Thanks, Tyler. Okay. Bye, everyone.