3 US-based academics awarded the Nobel Prize in economics for their work on wealth inequality

Nobel Committee announces the winners of the 2024 Nobel Prize in Economic Science.

Three economists based at US universities have been awarded the 2024 Sveriges Riksbank Prize in Economic Sciences for their work on how institutions affect wealth inequality.

Daron Acemoglu, Simon Johnson, and James A. Robinson will share the $1.1 million prize money, the prize committee said.

The prize, known in its entirety as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is widely considered the most prestigious prize in the field.

“Reducing the vast differences in income between countries is one of our time’s greatest challenges,” said Jakob Svensson, chair of the Committee for the Prize in Economic Sciences. “The laureates have demonstrated the importance of societal institutions for achieving this.”

The three economists have provided an explanation for why some countries are rich and others are poor, the committee said in a press release.

Their research has looked at the institutions formed in nations under European colonization. Where inclusive political and economic systems were created, long-term benefits and more prosperous populations persist today.

Conversely, extractive institutions provide short-term gains for the people in power, their research found. As long as the political system guarantees its continued control, no one will trust its promises of future economic reforms, they said.

Acemoglu, Johnson, and Robinson have developed theoretical tools that can help explain why these differences in institutions persist and how institutions can change, the committee said.

Committee member Professor Jan Teorell said the laureates have clearly shown us what the goals should be by showing both empirically and theoretically that inclusive institutions are better for long-term growth and prosperity.

BREAKING NEWS
The Royal Swedish Academy of Sciences has decided to award the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Daron Acemoglu, Simon Johnson and James A. Robinson “for studies of how institutions are formed and affect prosperity.”… pic.twitter.com/tuwIIgk393

— The Nobel Prize (@NobelPrize) October 14, 2024

Acemoglu and Johnson are professors at the Massachusetts Institute of Technology, while Robinson is director of the University of Chicago’s Pearson Institute for the Study and Resolution of Global Conflicts.

Johnson was previously chief economist at the International Monetary Fund from March 2007 to August 2008.

The winners have previously co-authored books based on their research. In 2012, Acemoglu and Robinson published Why Nations Fail: The Origins of Power, Prosperity, and Poverty, an argument for how and why democracies shape prosperity.

In 2023, Acemoglu and Johnson published Power and Progress, a look at whether digital technologies and AI will make life better for people. Once a techno-optimist, Acemoglu has since become more cautious about the impact of artificial intelligence, especially if all decision-making powers remain in the hands of tech leaders.

Acemoglu recently warned that the promise of massive efficiencies and productivity gains unlocked via AI may be overhyped. He said only 5% of jobs would be taken over or heavily assisted by AI technologies over the next decade.

“You’re not going to get an economic revolution out of that 5%,” Acemoglu said.