India-born Abhijit Banerjee Wins 2019 Economics Nobel

Indian-American Abhijit Banerjee, along with Esther Duflo and Michael Kremer, won the 2019 economics Nobel for their work on finding new ways to tackle poverty. Duflo, a French-American, and Banerjee have been married for four years. They teach in Massachusetts Institute of Technology. They are the first couple to win the economics Nobel, and the sixth Nobel-winning couple. Kremer is with Harvard University.

The Nobel citation said the work of the three economists has “…improved efforts to … fight global poverty” by breaking down a complex problem into “smaller, more manageable questions”.

Congratulatory tweets to Banerjee from Prime Minister Narendra Modi and finance minister Nirmala Sitharaman, external affairs minister S Jaishankar as well as CMs Arvind Kejriwal and Mamata Banerjee, were among many such messages from India and globally.

Banerjee is the second India-born to get the economics Nobel — the formal award is called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Duflo is the second woman to receive the prize.

Amartya Sen, winner of the economics Nobel in 1998, also congratulated Banerjee. Born in Calcutta (as Kolkata was called then) in 1961, Banerjee’s early education was in the city’s South Point School and his college was Presidency. After a masters in economics from Jawaharlal Nehru University, Banerjee got his PhD from Harvard.

Banerjee and Duflo’s work on poverty first drew global attention with the publication of their 2011 book, Poor Economics. In that widely acclaimed volume, the two Nobel Laureates had written: “…we have to abandon the habit of reducing the poor to cartoon characters and take the time to really understand their lives, in all their complexity and richness.”

The authors’ insights included why poor families often invest in the education of only one of several children or why small farmers are often reluctant to use better farming methods. Their central thesis was that small changes, including tweaks in existing structures, often produced lasting and big outcomes in reducing poverty. That book also brought attention to the usefulness of a new field research method for economics: the randomised controlled trial — used in pharmaceutical drug testing.

Banerjee has spoken on some of India’s current public policy debates. Speaking to CNBC-TV 18 after the announcement of the Nobel prize, Banerjee said India’s economy is “on shaky ground”, and that hope for growth revival is uncertain.

During the 2019 general election campaign, Congress said he was one of three economists the party had consulted while framing its universal basic income scheme — NYAY. Banerjee had told the media later than for NYAY to be funded, extra resources will have to be found. He was also one of the 108 academics who signed a letter that criticised government data analyses.

Banerjee and Duflo’s second book, Good Economics for Hard Times, is set for publication, and it draws on many current debates globally on public policy.

His work on development economics got Banerjee the Nobel, but his early approach to economics was heavily mathematical, people who knew him well during his college and post-graduate years said. Batchmates describe him as a “quant”, an oft-used term in academia for the mathematically gifted. His Harvard PhD was mathematics-heavy analyses of herd behaviour in stock markets under information asymmetry.

Those who know him said Banerjee was never a “nerd”, he read widely and was academically brilliant. He was a “fun guy” with a keen interest in Indian classical music that he inherited from his economist father, late Dipak Banerjee. But like his wide-ranging intellectual interests, Banerjee’s taste in music is also eclectic, said his friends.

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