Every October, headlines announce that someone has won "the Nobel Prize in Economics," right alongside the prizes in physics, chemistry, and literature. Here's the detail almost nobody mentions: Alfred Nobel never created an economics prize at all. The one we call by that name today is a much younger, and slightly controversial, addition.
A prize Nobel never asked for
When Alfred Nobel signed his will in 1895, he endowed five prizes: physics, chemistry, physiology or medicine, literature, and peace. Economics wasn't one of them. The prize we now associate with economics — officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — was established in 1968, more than 70 years after Nobel's death, by Sweden's central bank, Sveriges Riksbank, to mark its 300th anniversary.
The Riksbank endowed the prize as a permanent gift to the Nobel Foundation, and the foundation agreed to administer it alongside the originals, on the condition that it follow the same selection process. It was first awarded in 1969, jointly to Ragnar Frisch and Jan Tinbergen for developing and applying dynamic models to analyze economic processes.
The distinction has never fully gone away. Some members of the Nobel family have publicly objected to the economics prize carrying their name, arguing it lends economics an undeserved association with the hard sciences Alfred Nobel actually endowed. The Nobel Foundation's own position is that the prize is administered "according to the same principles" as the original five, even if it isn't technically one of them.
How a winner actually gets chosen
The process mirrors the other Nobel Prizes closely. Each year, the Royal Swedish Academy of Sciences — the same body responsible for the physics and chemistry prizes — sends out confidential invitations to thousands of qualified nominators: past laureates, university professors, and members of relevant academies worldwide. Self-nominations aren't accepted.
A dedicated committee then narrows the nominations down over several months, consulting outside experts on the technical merits of specific work. Nominations and deliberations stay sealed for 50 years, so the shortlist for any given year remains a genuine secret even from most economists. The winner is announced in October and receives the prize in Stockholm on December 10th — the anniversary of Alfred Nobel's death — alongside the other laureates.
The prize can go to up to three people, and it usually rewards work that reshaped how economists think, not a single discovery or event.
Notable winners worth knowing
A few laureates changed how the field itself is taught, and their names are worth recognizing even outside economics circles.
- Milton Friedman (1976) — awarded for his work on consumption analysis, monetary history, and stabilization policy; became one of the most influential and publicly recognizable economists of the 20th century.
- Daniel Kahneman (2002) — a psychologist, not an economist by training, honored for integrating insights from psychology into economics, effectively founding the field of behavioral economics.
- Elinor Ostrom (2009) — the first woman to win the prize, recognized for showing that communities can manage shared resources like fisheries and forests effectively without privatization or central regulation.
- Esther Duflo (2019) — the second woman and the youngest laureate to date, awarded jointly with Abhijit Banerjee and Michael Kremer for using field experiments to study global poverty.
- Claudia Goldin (2023) — the third woman and first solo female winner, honored for tracing the century-long history of women's labor market participation and the origins of the gender pay gap.
Why the "not a real Nobel" debate misses the point
Whatever its formal status, the prize has done exactly what the Riksbank designed it to do in 1968: give economic research the same visibility and prestige as physics or medicine. Whether or not it technically belongs on Alfred Nobel's original list, it has become the field's most consequential award — the one that decides, more than any journal or ranking, which ideas get remembered as economics' most important.