Nobel Prizes turn to economics

STOCKHOLM -- Given the churning turmoil of global markets sparked by the U.S. subprime crisis, soaring oil prices and a renewed strength by foreign currencies, it might seem appropriate that any of those issues could figure in determining the winner of this year's Nobel economics prize.

But, say watchers of the secretive prize, that's too tough a call to make given that the people who ultimately decide the winner — or, in years past, winners — tend to favor economic theories that have had time to take root, grow and prove resilient.

"It is so hard to predict. Last year it went to the labor market area, so perhaps it will be statistics this time, but then again the securities market hasn't won for about 10 years," said Hubert Fromlet, the chief economist of Swedbank in Stockholm.

Speculation on this year's prize has included economists who deal with international trade, macroeconomics and the labor market, among others.

Fromlet said that Jagdish Bhagwati, a noted proponent of free trade and critic of opponents of globalization, was one of his favorites.

"International trade is probably worth a prize," he said, noting that the Indian-born Columbia University economics professor was an external adviser to the World Trade Organization and served as a special policy adviser on globalization to the United Nations.

Other potential candidates include macro economists Robert Barro and Paul Romer, as well as arbitrage pricing researcher Stephen Ross, Europeans Jean Tirole in France and Assar Lindbeck in Sweden, Fromlet said.

Like the traditional Nobel science prizes — medicine, physics and chemistry — there is no precise formula for predicting whom the Royal Swedish Academy of Sciences will pick to win the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

Previous winners of the prize, created in 1968 and not one of the original five outlined by Alfred Nobel in his will, have ranged from how the control of information affects markets to welfare economics used to explain the mechanisms behind famine and poverty.