Prescott vs. Gross

Tomorrow, David Gross et al. will pick their Nobel prizes. There have been interesting exchanges at the news conference on Tuesday:

http://money.cnn.com/ ...

David Gross, whom I don't have to introduce, explained that

• "Making money is perhaps fun ... but it's nothing compared with exploring nature."

The reporters asked Prescott, whom I need to introduce - he shares the economy Nobel prize - about the effects on economic growth if all people thought like Gross.

• "It would be an unmitigated disaster."

Fair enough. The stability of the economy and humankind is based on the rule that the people like David Gross who don't have to follow the most simplified economic models are exceptional, and they should remain exceptional. The economy works because most people are subject to mechanisms that stimulate progress and production.

On the other hand, if every single human were able - and lucky enough - to contribute to the humankind as much as David Gross, the usual very-low-energy effective rules of economy, as Prescott knows them, would certainly break down. ;-)

This is a good point to say something related to Gross's statement - which may also be a news for many of our colleagues in economics:

• The economists like Prescott may be intelligent ... but it's nothing compared to the scientists like Gross.

Indeed, one does not have to be a Nobel prize winner to say the statements that Prescott chose, like "it's totally OK to have budget deficits and the trade gap and it's OK if the currency rates fluctuate - in fact, it's better because I get much more of my Nobel prize." Come on, Mr. Prescott. These statements may be true, or false - and most likely, I would tend to agree that they're true and I would agree with Prescott's debunking of keynesianism - but these statements are mostly political proclamations - and biased guesses - i.e. statements without a too deep science behind them.

Even though I think that Prescott is a very reasonable and well-educated economist with good convictions based on common sense, I would expect a little bit more respect from Mr. Prescott to the people who are undoubtedly smarter than he is. ;-)

Well, these exchanges are just fun, of course. At the end, the Nobel prize winners agree about more or less everything. For example, they agree that the calls to boycott Israeli scientists are misled and contradict the principles necessary for progress in science.

A previous article on my blog about the background of the 2004 Nobel prize winners is here.