Professor Simon Johnson is one of this year’s three laureates of the Nobel Prize in the economic sciences. On December 14th he will give an open lecture in Gothenburg with the title Technology and Global Inequality in the Age of AI.
Simon Johnson, a professor at the Massachusetts Institute of Technology (MIT), Cambridge, MA, USA, is invited by the University of Gothenburg and Chalmers and will give his lecture at the School of Business, Economics and Law.
They have helped us understand differences in prosperity between nations. This year’s laureates in the economic sciences – Daron Acemoglu, Simon Johnson and James Robinson – have demonstrated the importance of societal institutions for a country’s prosperity. Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better. The laureates’ research helps us understand why.
When Europeans colonised large parts of the globe, the institutions in those societies changed. This was sometimes dramatic, but did not occur in the same way everywhere. In some places the aim was to exploit the indigenous population and extract resources for the colonisers’ benefit. In others, the colonisers formed inclusive political and economic systems for the long-term benefit of European migrants.
The laureates have shown that one explanation for differences in countries’ prosperity is the societal institutions that were introduced during colonisation. Inclusive institutions were often introduced in countries that were poor when they were colonised, over time resulting in a generally prosperous population. This is an important reason for why former colonies that were once rich are now poor, and vice versa.
“Reducing the vast differences in income between countries is one of our time’s greatest challenges. The laureates have demonstrated the importance of societal institutions for achieving this,” says Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences.
The three researchers are praised for their insights into how differences in prosperity between countries can arise and why they persist.
“The significance of this research is enormous. It is about why there are such large differences in wealth between different countries. Without an understanding of the mechanisms behind this, you cannot do anything about it”, says John Hassler, who in addition to his role in the prize committee is also a Professor of economics at Stockholm University, in a press release from Royal Swedish Academy of Engineering Sciences (IVA).