George Akerlof facts for kids
Quick facts for kids
George Akerlof
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Akerlof in 2007
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George Arthur Akerlof
June 17, 1940 New Haven, Connecticut, U.S.
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| Institution | Georgetown University London School of Economics University of California, Berkeley |
| School or tradition |
New Keynesian economics |
| Doctoral advisor |
Robert Solow |
| Doctoral students |
Charles Engel Adriana Kugler |
| Influences | John Maynard Keynes |
| Contributions | Information asymmetry Efficiency wages |
| Awards | Nobel Memorial Prize in Economic Sciences (2001) |
| Information at IDEAS / RePEc | |
George Arthur Akerlof (born June 17, 1940) is an American economist. He is a professor at Georgetown University and a professor emeritus at the University of California, Berkeley.
In 2001, Akerlof won the Nobel Memorial Prize in Economic Sciences. He shared the award with Michael Spence and Joseph Stiglitz. They won for their work on "asymmetric information" in markets. This means when one side of a deal knows more than the other. George Akerlof is married to Janet Yellen, who used to be the head of the U.S. Treasury.
Contents
Early Life and Education
George Akerlof was born in New Haven, Connecticut, on June 17, 1940. His father, Gösta Carl Åkerlöf, was a Swedish immigrant who worked as a chemist. His mother, Rosalie Clara Grubber, was a housewife. George has an older brother, Carl, who is a physics professor.
Akerlof went to the Lawrenceville School and finished in 1958. He then studied economics at Yale University, earning his bachelor's degree in 1962. He later earned his PhD in economics from the Massachusetts Institute of Technology (MIT) in 1966. His main project for his PhD was called Wages and Capital. His advisor was Robert Solow, another famous economist who also won a Nobel Prize.
Academic Career
After getting his PhD, Akerlof started teaching economics at the University of California, Berkeley. He taught there for one year before moving to India. In 1967, he was a visiting professor at the Indian Statistical Institute in New Delhi. He returned to the United States in 1968.
Akerlof became a professor at Berkeley. From 1973 to 1974, he also worked as a senior economist for the White House Council of Economic Advisers. In 1977, he worked for a year at the Federal Reserve Board of Governors in Washington, D.C. There, he met his future wife, Janet Yellen.
In 1978, Akerlof and Yellen moved to the London School of Economics (LSE) in the United Kingdom. They stayed there for two years before coming back to the United States. In 1980, Akerlof became a professor at Berkeley again. He taught there for most of his career. He retired from Berkeley in 2010.
Later, he moved to Washington again when his wife, Janet Yellen, joined the Federal Reserve Board. From 2010 to 2014, Akerlof was a visiting scholar at the International Monetary Fund (IMF). In 2014, he joined the McCourt School of Public Policy at Georgetown University as a professor.
Contributions to Economics
Understanding Asymmetric Information
George Akerlof is most famous for his paper, "The Market for Lemons: Quality Uncertainty and the Market Mechanism". He published this paper in 1970. In it, he explained big problems that happen in markets when there is asymmetric information. This means one person in a trade knows more important things than the other.
For example, when you buy a used car, the seller knows more about the car's problems than you do. This can make it hard for good used cars to be sold, because buyers worry they might get a "lemon" (a bad car). Akerlof showed how this can make markets work poorly. This important idea is why he won the Nobel Prize.
Akerlof also worked with his wife, Janet Yellen, on the idea of "efficiency wages." This is when companies pay their workers more than the lowest possible wage. They found that paying more can make workers happier and more productive.
Identity Economics
Akerlof and his colleague Rachel Kranton created a new area of study called "identity economics." They looked at how a person's social identity affects their economic choices. They believe that people don't just choose things based on what they like. They also follow social rules about how people like them should act. These ideas first appeared in their paper "Economics and Identity" in 2000.
Understanding "Looting" in Business
In 1993, Akerlof and Paul Romer wrote about something called "looting." This happens when people who own companies decide it's better for them to take money out of the company instead of helping it grow. This can happen if there are weak rules or low penalties for bad behavior. It's often seen when a government promises to cover a company's debts.
They explained: "Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations. Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations."
Social Norms and the Economy
In 2007, Akerlof talked about "natural norms." These are the ideas people have about how they should behave. He showed how these norms can explain why the economy sometimes acts differently than what economic theories predict. Akerlof suggested that understanding social norms is important for studying how the economy works. He is seen as one of the people who started the field of "social economics."
Akerlof is also involved with groups like Economists for Peace and Security. He helps lead a program about social interactions and well-being. He is also on the advisory board for the Institute for New Economic Thinking. In 1985, he was chosen as a fellow of the American Academy of Arts and Sciences.
Personal Life
George Akerlof was married briefly to an architect named Kay Leong from 1974 to 1977. In 1978, he married Janet Yellen. She is also a famous economist. She used to be the head of the U.S. Treasury and the head of the Federal Reserve.
George and Janet have one son, Robert, who was born in 1981. Robert Akerlof is also an economist. He teaches economics at the University of Warwick.
In 2018, Akerlof signed a letter supporting Harvard University in a lawsuit. Other famous economists like Alan Krueger, Cecilia Rouse, Robert Solow, and Janet L. Yellen also signed it.
See also
In Spanish: George Akerlof para niños
- List of Jewish Nobel laureates
