The 2016 Nobel Prize in Economics belongs to two economists in the US

The 2016 Nobel Economic Prize has just been awarded to Oliver Hart of Harvard and Bengt Holmström at MIT.

The Royal Swedish Academy of Sciences has just announced the decision to choose Oliver Hart of Harvard University and Bengt Holmström of MIT to receive the 2016 Nobel Prize in Economics for their contributions to contract theory .

Modern economies are linked together by countless contracts. New theoretical tools established by Hart and Holmström should be of great value in understanding contracts and organizations in practice, as well as potential pitfalls in contract design.

One of the objectives of contract theory is to explain why contracts have many different forms and designs.

Professor Oliver Hart is British-American and Professor Bengt Holmström is Finnish.

According to Holmström's research, if a manager's payroll performance pays attention to short-term cash flow, it will negatively affect the company's health in the long run.

Two economists were awarded the 2016 Nobel Prize - (Photo: Nobelprize.org).

The questions raised in the study of contract theory are: should public services such as hospitals, schools, and prisons be owned by the state or private sector? Or should teachers, health workers, and prison officials be paid on a fixed or paid basis?

The Nobel Prize in Economics was selected by the Royal Swedish Academy of Sciences as a way of taking Physics and Chemistry prizes and is awarded every year in Stockholm, Sweden.

Before the announcement of the award, according to a poll by readers of Reuters news agency, French economist Oliver Blanchard was considered the brightest candidate for this year's Nobel Prize in Economics. Mr. Blanchard served as chief economist at the International Monetary Fund (IMF) and currently works at the Peterson International Economic Institute and Massachusetts Institute of Technology (USA). He has made important contributions in macroeconomic research, especially the determinants of economic fluctuations and employment.

However, the Wall Street Journal (USA) points out that anyone who decides to award the Nobel Prize in Economics can be affected by political factors. If it is awarded to an 82-year-old Indian-American commercial economist Jagdish Bhagwati, it will be a strong message to direct international attention to the benefits of free trade, in the context of which This book is suffering a lot of criticism throughout Europe and the US, the paper cited for example.

Bhagwati, who currently teaches at Columbia University (USA), is known as a strong advocate of free trade and has long been considered a permanent candidate for the annual Nobel Prize in Economics.

Economic studies related to other hot issues today such as climate change, inequality in tax policy, production growth, are also expected to be put on the table for Review this year's Nobel Prize in Economics.

Macroeconomics is the most popular field of research for scientists who receive the Nobel Prize in Economics, up to 9 people have been awarded for research in this field.