comments on 2026 Nobel Economic Prize

Some comments on 2026 Nobel Economic Prize

Let’s look at Nobel committee’s overall appraisal of the works of this year’s winners.

The Laureates’ research has made it possible to manage major macroeconomic crises far more effectively than before. It has been hugely beneficial during the pandemic and the energy crises of recent years, which have not had such long-term consequences for growth and inflation as in the critical periods of the 1970s. We have not become mired in a catastrophic economic depression like that of the 1930s. Recessions and episodes of high inflation have not disappeared, but they are less long-lasting.

If the assessment is accurate, our society’s long term viability must be more promising today than 1930s. In 1930s, Keynes observed,

We are suffering from the growing pains of youth, not from the rheumatics of old age. We are failing to make full use of our opportunities, failing to find an outlet for the great increase in our productive powers and our productive energy. Therefore we must not draw in our horns; we must push them out. Activity and boldness and enterprise, both individually and nationally, must be the cure. (Keynes, 1932, p 156)

Today, fertility rates have dropped below the replacement rate and the average ages have been rising steadily for several decades in most countries dominated by mainstream economic theories.

In particular, after the 2008 financial crises, the fertility rate in US has dropped sharply below two. The quantitative easing policy, which has pushed asset prices to the sky, has made the lives of ordinary people increasingly difficult.

Societies dominated by mainstream economic theories are much less viable today than 1930s, when Keynes first proposed his theory. Many people have recognized the grave consequences of an aging population and a dying society. Yet, the mainstream economists focus on the increasingly narrow indicators that only benefit the rich and powerful, a very small percentage of the total population.

Nobel committee is quite aware the work it prop up is not convincing. It resorts to a big lie to justify its decision.

         Quite simply, there are no other viable alternatives.

But the biophysical economic theory, among other theories, is a viable alternative.