DEFINITION of 'Nobel Memorial Prize In Economic Sciences'

The Nobel Memorial Prize in Economic Sciences is a prestigious award acknowledging outstanding contributions to the science of economics. The Nobel Memorial Prize in Economic Sciences is commonly called the Nobel Prize in Economics. The official name for the award is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

BREAKING DOWN 'Nobel Memorial Prize In Economic Sciences'

One of the most esteemed awards in economics, the Nobel Memorial Prize in Economic Sciences is awarded yearly to individuals making exceptional contributions to economics. An endowment from Sveriges Riksbank, Sweden's central bank, provides funding in perpetuity to pay the Nobel Foundation's administrative expenses pertaining to the award along with the monetary prize, which has been SEK8 million (approximately $1 million) since 2012.

Founding of the Nobel Memorial Prize in Economics

The prize was established in 1968 by a donation from Sweden's central bank, the Sveriges Riksbank, on the bank's 300th anniversary. Although it is not one of the prizes that Alfred Nobel established in his will, it is referred to along with the other Nobel Prizes by the Nobel Foundation.

Nobel Memorial Prize in Economic Sciences Awards Process

Each year, the Academy's Economics Prize Committee "sends invitations to thousands of scientists, members of academies and university professors in numerous countries, asking them to nominate candidates for the Prize in Economics for the coming year. Members of the Academy and former laureates are also authorized to nominate candidates." The proposals are reviewed by the Prize Committee and specially appointed experts. Before the end of September, the committee chooses potential laureates. If there is a tie, the chairman of the committee casts the deciding vote. Next, the potential laureates must be approved by the Royal Swedish Academy of Sciences.

The prize is awarded by the Royal Swedish Academy of Sciences following an invitation for nominations. A maximum of three individuals can share a prize during the same year. Awards are presented at the annual Nobel Prize Award Ceremony in Stockholm, Sweden each year on Dec. 10, the anniversary of Nobel's death.

Past Nobel Memorial Prize in Economic Sciences Winners

The first prize in economics was awarded in 1969 to Ragnar Frisch and Jan Tinbergen "for having developed and applied dynamic models for the analysis of economic processes." In 2009, Elinor Ostrom became the first woman awarded the prize.

Other prominent winners include: Milton Friedman "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy;" Harry Markowitz, Merton Miller and William Sharpe "for their pioneering work in the theory of financial economics;" and John Nash and Reinhard Selten “for their pioneering analysis of equilibria in the theory of non-cooperative games."

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