E.R. RAMACHANDRAN writes: Since 1990, of the 40 Nobel prize winners in economic sciences, 30 have held the passport of the United States of America.
In the last 10 years alone, of the 22 winners, 18 have come from the US of A.
Their subjects range from studies of economic governance of countries and macro and micro economics, to fluctuation of markets, economic governance of boundaries of firms, business cycles, etc.
All very imposing and impressive, indeed.
The group of thirty, often abbreviated to G30, is an international body of leading financiers and academics which aims to deepen understanding of economic and financial issues, and to examine the consequences of decisions made in the public and private sectors related to these issues.
The topical areas within the interest of the group include:
• Foreign exchange, currency, etc.
• International capital markets
• International financial institutions
• Central banks and supervision of financial services and markets
• Macroeconomic issues such as product and labor markets, etc.
Their agenda looks grand, too.
Yet, there is a fundamental question to be asked.
Of what use is all this expertise, all this global recognition, if it is not of use to the world?
In other words, how is it that neither the Nobel prize winners, especially from US, nor the worthies of G30 have been able to predict the double dip recession that the United States is currently facing, which is affecting markets and economies of countries across the world?
It was the same story in 2008 -10, when none of them foresaw the subprime mortgage fiasco which affected the middle-class in the US and in Europe too. The unemployment and underemployment that touched the working class may stay permanently or at least for a decade more.
Maybe, the world lives in hope, which is why the dire predictions of the odd Cassandra like Joseph Stiglitz do not sound like music to the ears. Maybe, the world lives in hope, which is it respects the pessimism of “Dr Doom“, Nouriel Roubini, only in retrospect.
Or, maybe, it is not the job of the Nobel laureates at all to play soothsayers and “predict” what is going to happen next, although some like Paul Krugman have done that to no avail.
Still, looking at all the gloom that the US economy is causing around the world, the question needs to be asked if only to come to terms with what’s happening.
Photograph: The 2005 Nobel laureates in economics, Thomas Schelling and Robert Aumann (courtesy Nobel Foundation)