Context
Nobel Prize in Economics awarded to Daron Acemoglu, Simon Johnson, and James Robinson
About Nobel Prize in Economics
- Awarded to Daron Acemoglu, Simon Johnson, and James Robinson
- For research on wealth inequality between nations, focusing on the role of political and economic systems, especially those introduced by European colonizers.
- Key Areas of Research:
- Study of Institutions: Analyzed how political and economic institutions influence national prosperity and development.
- Impact of Colonialism: Explored the long-term effects of colonial systems on wealth inequality.
- Comparative Studies: Example: The divided city of Nogales (U.S. and Mexico), showing how different institutional frameworks lead to varying prosperity.
- Focus on Democracy: Found that nations transitioning to democracy experience faster economic growth compared to non-democratic regimes.
- Publications: Acemoglu co-authored “Why Nations Fail,” which investigates the roots of economic disparity.
Significance of Their Work:
- Understanding Wealth Inequality:
- Explains why some countries prosper while others lag behind, based on differences in institutions.
- Role of Institutions:
- Emphasizes the need for inclusive political and economic institutions for sustainable growth and reduced inequality.
- Practical Implications:
- Offers insights into institutional reforms necessary in poorer countries to drive development.
- Global Relevance:
- Findings are critical for narrowing the income gap between nations.
- Support for Democracy:
- Highlights the positive impact of democratic institutions on economic growth and development.
Source: TH
Previous Year Question
With reference to the Indian economy, “Collateral Borrowing and Lending Obligations” are the instruments of:
[UPSC Civil Services Exam – 2024 Prelims]
(a) Bond market
(b) Forex market
(c) Money market
(d) Stock market
Answer: (c)
