Nobel in Economics Given to Angus Deaton for Studies of Consumption - The New York Times - 1 views
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“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” the Royal Swedish Academy of Sciences said in announcing the economics prize, the last of this year’s Nobels. “More than anyone else, Angus Deaton has enhanced this understanding.”
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“Simple ways of looking at the world are often the basis of policy, and if the statements are wrong, then the policy may be wrong also,” said the economist Janet M. Currie, a Princeton colleague. “He’s always had a concern for trying to capture the complexity of the real world.”
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Economics before the 1980s relied on the assumption that the people represented by a large economic aggregate behaved in roughly the same way, not because that made sense but because accounting for diversity was too hard.
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“What he’s shown is that you do learn a great deal more by looking at the behavior that underlies the aggregates,”
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Professor Deaton said he hoped “carefulness in measurement” would be his legacy. He said his mentor, Richard Stone, a Cambridge professor who won the Nobel in economics in 1984, had ingrained in him the importance of good data. “I’ve always wanted to be like him,” Professor Deaton said. “I think putting numbers together into a coherent framework always seemed to me to be what really matters.”
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His work also is marked by an insistence that theories must explain these more complicated sets of facts. “A good theoretical account must explain all of the evidence that we see,” Professor Deaton wrote in a 2011 essay on his life in economics. “If it doesn’t work everywhere, we have no idea what we are talking about, and all is chaos.”
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“There’s a fair amount of policy agnosticism that comes from this — it emphasizes more the heterogeneity of outcomes,” Professor Rodrik said of Professor Deaton. “He’s somebody with quite a sharp tongue, and he’s often had as his target people who make very strong statements about this policy or that policy.”
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Proponents of foreign aid programs are a frequent target. Professor Deaton has argued that such investments often undermine local governance and the development of institutions necessary to sustain development.
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“Life is better now than at almost any time in history,” he wrote in the opening lines of his 2013 book “The Great Escape,” a popular account of his work. “More people are richer and fewer people live in dire poverty. Lives are longer and parents no longer routinely watch a quarter of their children die.”
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He counts climate change and increased economic inequality in developed nations as threats to this progress.
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He has noted in other work that inequality occurs naturally because of divergent luck, but he has said that the growing gaps in recent years pose a new economic and political challenge.
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“I think inequality has gone past the point where it’s helping us all get rich, and it’s really becoming a serious threat,” he said