Entrancing Economics: Nobel Prize Winners in the Field of Economics

If there were a view of the classroom when Scott Cunningham usually teaches, it would be filled with curious business students. Their eyes focused and minds engaged on what Cunningham, who has a doctorate in economics, has to say about the constantly evolving field of economics.

However, Cunningham found himself in a much different place Thursday evening as he discussed the prevalence and work of Nobel Prize winners in economics. Cunningham spoke to people of all ages and interests in the Paul L. Foster Campus for Business and Innovation’s McClinton Hall about this topic.

The Nobel Prize regarding economics “was half given to labor economics and half given to something called causal inference,” Cunningham said.

According to Cunningham, in 2021, David Card, a professor of economics at the University of California, Berkeley, took home the prize for the labor economics side of things. Joshua Angrist, a professor of economics at Massachusetts Institute of Technology, and Guido Imbens, a professor of economics at Stanford University, split the prize for the causal inference side of things.

David Card “has been called the greatest labor economist of his generation,” Cunningham said. Joshua Angrist and Guido Imbens are both known for their “methodological contributions to the analysis of causal relationships.”

Labor economics is “empirical contributions,” Cunningham said. Causal inference is based on “cause and effect.”

When Cunningham discussed causal inference, he showed the audience a list of questions that could have many answers, leaving it hard to conclude anything definitive from them. “These are very difficult questions to answer,” Cunningham said. “We need some comparison group.”

Cunningham dove deeper into the “counterfactual” definition of causality. This is a method where scientists measure two different worlds of opposite effects, taking us to a place where researchers can “estimate” results or make statements about certain things, Cunningham said.

“It was the properties of physical randomizing that could allow us to make statements,” Cunningham said. Physical randomizing “deletes” selection bias and is needed to “address things like poverty.” With physical randomization, “economics shifts from a theoretical to a very empirical approach.”

Cunningham gave credit to the “Credibility Revolution” for Card, Angrist, and Imbens taking home the Nobel Prize. The Credibility Revolution is based on the desire to try “to give more believable answers to critically important questions,” Cunningham said. Card, Angrist, and Imbens “won” on this front.

The Nobel Prize is “the Super Bowl of academics,” as the host of the panel later described. The award is highly anticipated each year by many experts in every field and industry imaginable as it awards ground-breaking discoveries from the previous year in every field. The award is thought be the greatest achievement and honor in each field. “It’s a deeply deserved award in my opinion,” Cunningham said.