Two Americans were awarded the Nobel Memorial Prize in Economic Sciences on Monday, each earning about $1.2 million.
Alvin Roth of the Harvard Business School and Lloyd Shapley, professor emeritus at the University of California, Los Angeles, were awarded for “the theory of stable allocations and the practice of market design.”
Monday’s award was the last of the 2012 Nobel awards announced.
On Friday, the 27-nation European Union received the Nobel Peace prize for six decades of contributions “to the advancement of peace and reconciliation, democracy and human rights in Europe.”
The $1.2 million, or 930,000 euros, awarded prize comes during the union’s biggest internal crisis since it was established in the 1950s, the Associated Press reported.
Unfortunately, the prize money is a drop in the bucket for Europe’s indebted nations like Greece, Spain and Portugal.
The award announcement precedes an EU Summit scheduled for Oct. 18-19, by which time a deal may be reached detailing austerity measures for Greece, which is still working out the terms of a $224 billion (173 billion euro) bailout package.
What will the EU, which is reportedly going to split the prize money, do with $1.2 million?
Past winners, including President Barack Obama from 2009, have donated the money to charities.
Critics lambasted the prize announcement.
“First Al Gore, then Obama, now this. Parody is redundant,” tweeted Daniel Hannan, a lawmaker from Britain’s Conservative Party, the AP reported.
Former U.S. Vice President Gore won in 2007 for fighting climate change.
When asked what the EU should do with the prize money, Guy LeBas, chief fixed income strategist with the brokerage, Janney Capital Markets, said “all tongue firmly in cheek” that the EU may want to apply the money toward improving its economy, such building a better quantitative model for bank stress tests, which only failed 9 of 91 European banks tested under eurozone regulators in July.
LeBas said the EU may be better off taking analysts from credit ratings firms Moody’s, S&P and Fitch “out to a five star dinner in Paris and lobby against downgrades.” Otherwise, the EU could enlist the help of former German Chancellor, Helmut Kohl, who oversaw his country’s reunification in the 90s, and former French president, Francois Mitterrand, “as a consultant team to get other EU leaders on the same page with one another.”
Peter Morici professor at University of Maryland’s Robert H. Smith School of Business suggested the EU, “donate it for food relief to those struggling in Greece, Portugal and Spain.”
Martin Baily, senior fellow in the Brookings Institution’s Economic Studies Program said he would buy a copy of Ron Chernow’s biography, “Alexander Hamilton” for all policymakers in Europe, perhaps with the section on Hamilton’s decision to assume the debts of the states after the revolution underlined.
“Strongly opposed by many, including Madison and Jefferson, Hamilton was able to work out a deal that created federal debt and reserved important taxing power to the federal government. This policy saved the union,” Baily said.