When markets failed and crisis took the day,
John Maynard Keynes, he showed a novel way.
The "General Theory" challenged older laws,
And found in aggregate demand the cause.
For full employment was no natural state,
But one the government could cultivate.
When private spending drops, the state must spend,
To bring the slump unto a sudden end.
Through fiscal policy, the levers pulled,
A steady hand where laissez-faire once ruled.
He saw the future's need for guiding hand,
To save the system in a troubled land,
To smooth the cycles, banish boom and bust,
In public action, placing vital trust.
The Schumpeterian Gale
But Schumpeter observed a different scene,
A dynamic force, incessantly unseen.
Not calm equilibrium, but wilder flow,
Where innovation makes the market grow.
The entrepreneur, a hero in the fray,
Destroys the old to build the strong and new, each day.
This "creative destruction," a perennial gale,
Ensures that stagnant firms will surely fail.
The old is broken, capital set free,
For better, faster, brighter things to be.
He saw in dynamism, capitalism's strength,
Through cycles long, across the whole system's length.
Not steady state, but progress through the fight,
A vibrant chaos that brings forth the light.
The Marxist Critique
Karl Marx observed the capitalist machine,
A system built on surplus, sharp and keen.
He saw two classes: owners and the workers bound,
Where exploitation was the only sound.
The labor theory of value, his core belief,
Showed capital accruing for the chief.
The worker's wage kept low, a bare extent,
While profit soared, on labor's back was spent.
He saw the system tending to its end,
As contradictions would forever bend.
Inherent crisis, revolution's call,
To overthrow the structure, see it fall.
A future built on shared and equal good,
A classless society, as it should.
The Neoclassical Answer
Against the critique, the Neoclassics rose,
To argue how the market freely flows.
No labor value, but utility the measure,
Of how consumers find their daily pleasure.
With supply and demand, the price is set,
A perfect balance, with no future threat.
They model choice, the rational mind at work,
Where individual decisions never shirk.
Equilibrium is the end we seek,
Efficient allocation, so to speak.
They see the "is," not how the world "ought" to be,
In elegant math, finding clarity.
They built on Smith, a rigorous design,
Where markets work, a system true and fine.
The Great Debate Endures
The battle rages still, in lecture halls,
When one or other theory loudly calls.
Does structure bind, as Marx had prophesied?
Or individual choice, as Neoclassics cried?
Is Keynes the answer to the slump and pain?
Or Schumpeter's gale the source of all our gain?
These giants stand upon the intellectual stage,
Competing insights for a complex age.
No single truth can capture every part,
Of human striving, industry, and heart.
So theory evolves, as history unfolds,
And new chapters of the story are retold.
The discourse lives, a vibrant, endless fight,
To bring our economic world to light.
The modern field embraces many views,
And from this rich variety we choose.
A pluralistic vision starts to rise,
To see the world through many different eyes.
From behavioural finance, a human bent,
To complex systems, elegantly spent.
They take the best that each great mind supplied,
And leave the older, lesser truths inside.
The future of economics is a blend,
Of all these thoughts that history did send.
No single master plan, no perfect key,
But open-minded curiosity.
To understand the world and manage fate,
We need all theories early ones and late
The Prize from Sweden
A prize bestowed by Sweden's noble bank,
Upon the economists of highest rank.
It shines a light on theories that expand,
The way we view the market and the land.
From Friedman's money, to the complex game
Of information, where Stiglitz made his name.
They study man, our choices, flaws, and strengths,
Through data streams of vast and varied lengths.
From global poverty, to how we share the commons,
Their insights ring like universal summons.
A testament to all the minds so bright,
Who push the darkness from economic sight,
And show us all, with clarity and care,
The subtle forces in the global air.
II. The Hall of Laureates
In history's hall, their names are now engraved,
For all the knowledge they have bravely saved.
Sen saw the poor, and capabilities,
While Kahneman explored the mind's caprices.
Ostrom, the first woman, showed the common good,
And how a community, when understood,
Can manage resources without state command,
A potent lesson for a troubled land.
And Goldin showed the gender gap's long arc,
Illuminating history's great dark mark.
These laureates, in brilliance they align,
A constellation, luminous and fine,
Whose work provides the tools we need to build,
A world where economic promise is fulfilled.
III. The Quest for Growth
Now Mokyr, Aghion, and Peter Howitt share,
The recent prize, a testament so rare.
Their work on innovation's potent might,
Reveals how economies ignite.
They show "creative destruction," the dynamic key,
To everlasting growth for all to see.
Not just accumulation, but the new,
That breaks the old, and makes the system true.
This endless cycle of the broken and the made,
Ensures that progress will not ever fade.
They built on Schumpeter, that older seer,
Whose "gale" of progress conquered doubt and fear.
Their models chart the future's bright terrain,
Where novel ideas bring constant, vital gain.
IV. The Power of Institutions
And Acemoglu, Johnson, Robinson,
Showed why some nations thrive beneath the sun.
They delved in history, governance, and law,
To find the essence, the defining flaw.
Inclusive systems, where the many share,
Will build the wealth and banish all despair.
While extractive states, where few maintain their grip,
Will see their economies begin to slip.
The rules of game, the institutions' might,
Determine progress, banish endless night.
Their studies teach us, clearly and so fast,
That stable, open institutions last,
And drive the prosperity that all men seek,
A powerful truth for every state to speak.
Behavior of Man
But beyond structures and the growth we chase,
The human element finds its proper place.
The "nudge" of Thaler, and the bias shown,
In our decisions, where the seeds are sown
Of flaw and error, often leading astray,
From rational paths of the Neoclassic way.
For we are human, flawed and often weak,
And behavioral science learns the truths we speak.
It blends psychology with economic fact,
To see how real people think, and how they act.
This field acknowledges the mind's design,
And helps us build a world that is more fine,
By understanding how our brains behave,
From bias and from error, us to save.
VI. A Future Yet Unwritten
The tale of theory has no final end,
As new discoveries around us bend
The old assumptions, forcing us to see,
A more complex reality to be.
From data science and machine learning's eye,
New truths about our world may soon apply.
The quest continues, in each year's award,
New insights wait, their knowledge to afford.
The laureates provide the tools we need,
To plant the future, a potential seed.
The next great mind, in quiet study bent,
May shape the world, with new ideas sent.
In nineteen sixty-nine, the prize began,
A new tradition for the mind of man.
No Nobel will, no ancient, shared intent,
But Sweden's bank, where the award was lent
A borrowed glory, though the science soared,
Its value recognized and much adored.
The very first to stand upon the stage,
And turn a brand new, groundbreaking, vital page,
Were Ragnar Frisch and Jan Tinbergen, two,
Who brought a mathematical vision through.
They shaped the field, through models sharp and clean,
A revolution in the economic scene,
For "econometrics" was their chosen art,
To make the data speak right from the heart.
Frisch and Tinbergen
Frisch of Oslo, brilliant and profound,
On history's data, solid methods found.
He coined the term, "econometrics" he named,
A blending of the math, the stats, acclaimed.
He built the models, deep and intricate,
To understand the movements of the state.
And Tinbergen, the Dutchman, with his gaze,
Applied the models, clearing through the haze.
He planned the systems, nations to guide,
Where policy could turn the ebbing tide.
For their dynamic models, they were praised,
A powerful new science they had raised.
They showed that numbers, structured and aligned,
Could chart the future of all humankind.
Samuelson's Synthesis
The following year, a singular bright star,
Paul Samuelson, a voice that traveled far.
The first American to claim the prize,
For raising science in the public's eyes.
He built the bridge, the "Neoclassical Synthesis,"
Where micro-markets met the Keynesian thesis.
He proved with math, that logic could prevail,
And left a textbook, a best-selling tale.
From public goods to trade's complex design,
His rigorous framework was a master sign.
A generalist whose genius knew no bounds,
In every field, his influence resounds.
He showed that economics could be strong,
With mathematics where it did belong.
IV. Kuznets and the Wealth of Nations
Then Simon Kuznets, in seventy-one,
Whose groundbreaking, tireless work was done
On national income, measuring the flow,
And how a nation's wealth could truly grow.
He gave us GDP, the vital measure,
A statistical and empirical treasure.
He charted growth across the years of time,
And studied inequality's harsh climb.
He saw the curve that showed us rich and poor,
And how development could change the score.
His data, vast and meticulously kept,
Allowed the world to see while others slept.
He made the numbers speak, a language clear,
Dispelling abstract theory's doubt and fear.
Hicks and Arrow, General Equilibrium
In nineteen seventy-two, a shared award,
For two great minds, their brilliance could afford.
John Hicks, the Brit, and Kenneth Arrow, bold,
A story of equilibrium was told.
They perfected systems where all markets meet,
And individual choices were complete.
Their General Equilibrium theory showed,
How all the economic flows bestowed
A single balance, where supply met demand,
Across all goods and services in the land.
They proved the system's logic, sharp and fine,
A mathematical, elegant design,
That rational choice, with perfect information's aid,
A stable economic universe had made.
VI. Leontief’s Input-Output
The following year, the prize went to Leontief,
A Russian-American, whose core belief
Was in the structure of production's flow,
And where the inputs in the system go.
He built the input-output table, vast and wide,
To see where industries and sectors tied.
A map of trade, a matrix of supply,
To track the goods that every nation buys.
He showed how war could stress the system's frame,
And how a single policy could game
The whole economy in intricate detail,
A powerful tool that did not ever fail.
He saw the interconnections of the whole,
And gave the planners the ultimate control.
In seventy-five, the world of risk appeared,
As Tjalling Koopmans' methods were revered,
With Leonid Kantorovich, a shared acclaim,
For optimal resource planning was their aim.
They found the best path when choices were constrained,
And inefficiency was thereby trained.
Their "linear programming" was the mighty tool,
To optimize the outputs by a rule.
They showed the best use of scarce resources' might,
And brought efficiency to brilliant light,
From Soviet planning, to the Western firm,
Their methods proved to stand the test of term.
A powerful way to manage complex ends,
Where scarcity and hard reality blends.
VIII. Friedman's Monetary Might
In seventy-six, a singular voice did ring,
As Milton Friedman's theories took the wing.
He championed the power of the supply of cash,
And struck the Keynesian orthodox with a clash.
He argued that inflation was a choice,
A monetary phenomenon, giving voice
To central banks' command, their solemn duty,
To keep the currency in perfect beauty.
He showed that markets, left to their own devices,
Could manage better through the world's great crises.
His voice for freedom, limited the state,
And sealed the Monetarist's enduring fate.
A giant of the age, whose words still guide,
The policies where nations will confide.
The Rationality of Expectation
In nineteen eighty, the new ideas took hold,
As Lawrence Klein a vital story told.
He built great macro-models, vast and deep,
To help the forecasters their promises keep.
A different strain, that year of seventy-nine,
Was built on Theodore Schultz's design,
And Arthur Lewis, focused on the poor,
The ways that developing nations could procure
A better standard, a productive shift,
Where human capital began to lift.
The "rational expectations" then appeared,
With Robert Lucas, soon to be revered.
He showed that people were not easily fooled,
And policies could not be simply ruled.
The Efficiency of Markets
Eugene Fama, Lars Hansen, and Shiller then,
Explored the market's mind with clever pen.
Fama said markets were efficient, strong,
With all information where it did belong.
Prices told the truth, without a single lie,
Reflecting all the data passing by.
Shiller saw the bubble, the irrational wave,
That caused the market's many a sad grave.
And Hansen provided tools to make it clear,
The data strong, and banishing the fear.
They delved in finance, how the prices move,
And what the future's volatility can prove.
The story shifts from grand macro designs
To how a single stock or bond aligns.
Analysis of Risk
In nineteen ninety, Merton Miller came,
With Harry Markowitz, to global fame.
And also Bill Sharpe, all three shared the prize,
For showing risk beneath financial skies.
Markowitz showed us how portfolios blend,
To manage risk right until the very end.
Diversification was the vital key,
To build a safer, stronger destiny.
Sharpe gave the CAPM, a model strong and true,
To price the assets in our world for you.
While Miller focused on the firm's great choice,
And how their debt and equity find their voice.
Their work in finance changed the very game,
And risk and return were never quite the same.
XII. The Growth of Nations
In ninety-five, the prize to Bob Lucas went,
For rational expectations, heaven sent
To challenge Keynesian models of the past,
And show that human foresight holds quite fast.
His growth theory showed us why some nations fly,
While others seem to let their chances die.
Human capital and innovation's might,
Are what propel a country to the light.
And later Romer showed us knowledge's power,
A limitless resource in our modern hour.
Technology is key, a non-rival good,
That builds the wealth of every neighbourhood.
XIII. The Design of Mechanism
In twenty-twelve, the world took time to see,
The power of mechanism design's decree.
Alvin Roth and Lloyd Shapley shared the stage,
For solving problems in this modern age.
Not markets free, but careful rules designed,
To match the buyers with the perfect kind.
From kidney donors to the school's selection,
They optimized each complex interconnection.
They matched the doctors to the hospitals' need,
Ensuring systems flourish and succeed.
Their algorithms help to find the match so clear,
When markets fail, their elegant solutions are near.
A powerful blend of theory and applied,
Where thoughtful rules the systems gently guide.
XIV. The Auction's Inner Workings
In twenty-twenty, the auction's structure shown,
With Milgrom and with Wilson, fully known.
They studied sales where rules defined the game,
And brought efficiency unto the name.
They helped design the systems of the airwaves,
Where billions flow, as clever bidding saves.
How bidders think, and how the rules dictate,
The outcomes sealed by market and by fate.
Their insights help us structure sales today,
Ensuring fairness in a complex way.
They showed the world that structure matters most,
When selling spectrum on the global coast.
XV. The Experimental Turn
In two thousand two, the field began to turn,
When V. Smith and Kahneman made us learn.
They brought the lab experiments to the fore,
To see how real people act and what's in store.
Vernon Smith built markets in the lab, to see,
If theory matched reality's decree.
He found that simple rules could bring the price
To equilibrium, a scientific slice.
Kahneman showed our bias, flawed and deep,
While rationality was fast asleep.
They made us question models, clean and smart,
And showed the human element, the heart.
Their work began the age of testing new,
To see if theory's claims were truly true.
XVI. The Poverty Fighters
In twenty-nineteen, a powerful award,
For those who help the poor, their simple hoard.
Esther Duflo, Abhijit, Michael Kremer too,
Brought experiments to see what we could do.
They tested methods, simple, clear, and fast,
To see which interventions truly last.
From deworming children to better school supplies,
They used the lab to open up our eyes.
A rigorous approach, a data-driven way,
To lift the world and bring a brighter day.
They showed that small changes make a difference vast,
And poverty need not forever last.
Their science brings the hope that
the toughest problems that the world revolves
