
14 October 1977
THIS YEAR's ECONOMICS PRIZE AWARDED TO
BERTIL OHLIN AND JAMES MEADE
The Royal Swedish Academy of Sciences has decided
that the 1977 Prize in Economic Sciences in Memory of Alfred
Nobel shall be shared equally by
Professor Bertil Ohlin, Stockholm, Sweden,
and
Professor James Meade, Cambridge, UK,
for their pathbreaking contributions to the theory of
international trade and international capital movements.
Bertil Ohlin's classic work,
Interregional and International Trade, has brought him
recognition as founder of the modern theory of international
trade. He has developed a theory that demonstrates which factors
determine the pattern of foreign trade and the international
division of labour on the one hand, and on the other, shows what
effect foreign trade has on the allocation of resources, price
relations and the distribution of income. Ohlin has also
demonstrated similarities and differences between interregional
(intra-national) and international trade, and the connection
between international trade and the location of industries.
James Meade, mainly in his major work, The Theory of
International Economic Policy, has demonstrated the effects
of economic policy on foreign trade and penetrated the problems
of stabilization policies in "open" economies. "Open" economies
are then defined as those which are greatly dependent on foreign
trade. His analysis has particularly concentrated on the
conditions necessary for internal and external balance, i.
e., balance both in the domestic economy, and in foreign
transactions. He has also shown why and how a successful
stabilization policy must take into account not only the level of
total demand for goods and services, but also relations between
prices and costs. These achievements have made Meade the leading
pioneer in the field of international macro-theory and
international economic policy.
Both Ohlin's and Meade's works attracted a great deal of
attention immediately after publication - 1933 and 1951/55,
respectively. They have also been points of departure for
extensive empirical research on international trade, on
international movements of capital, and on stabilization problems
in open economies.
The breadth and importance of Ohlin's and Meade's contributions
have, however, not become obvious until the sixties and
seventies, in conjunction with the growing internationalization
of the economic system. It has become increasingly clear that
problems related to the allocation of resources, business cycles,
and the distribution of income are very much international
problems. This means that foreign trade, international price
fluctuations, the international allocation of economic activities
and the transfer of resources, as well as the international
payments system have become dominant factors in economic analysis
and economic policy.
This year's Nobel Prize - Skr. 700.000 - will be shared equally by Ohlin and Meade.