George Akerlof ’62, a University of California at Berkeley economics professor, has always considered himself a polite person, but when he answered the phone at 6:17 a.m. last Wednesday, all forms of common courtesy suddenly evaded him. It was a call from Stockholm, Sweden informing him that he had won the Nobel Memorial Prize in Economic Sciences — and he forgot to say “thank you.”
“I was just so stunned,” Akerlof said. “The only thing I could say was ‘Yes!’ ‘Yes!’ ‘Yes!'”
The Nobel Foundation honored Akerlof for a study he had done more than 30 years ago. That landmark work analyzed the market for used cars as an example of situations in which a buyer and a seller have different levels of information in a transaction.
Nobel Memorial Prizes in Economic Sciences were also awarded to Columbia School of Business professor Joseph Stiglitz and Stanford economics professor A. Michael Spence, both for their contributions to asymmetric information.
Although there had been much speculation that he would win the prize in the near future, Akerlof said neither he nor his family really expected it.
“There was some discussion that he was being considered and that his name was high up on the list,” said Carl Akerlof ’60, George’s brother. “But I certainly didn’t know that it would be this year.”
In the wake of such a pleasant surprise, his family members had nothing but praise for their newly crowned Nobel laureate.
“Well, I’m obviously very proud of him,” said his wife, Janet Yellen GRD ’71. “He’s made a lot of terrific contributions to economics, and he’s also done a lot of work in integrating other fields like sociology and psychology with economics.”
Yellen, also a UC Berkeley economics professor, is currently a member of the Yale Corporation. She also served as the chair of the president’s Council of Economic Advisors from 1997 to 1999.
“Both of my parents are economists, so they talk about economics quite a bit,” said Robert Akerlof ’02, their son, who is majoring in economics and mathematics. “They’re both true intellectuals in the sense that they truly enjoy talking about economics, and some kids might not like that, but I really do. I feel quite able to participate in the discussions.”
Following his undergraduate days at Yale, Akerlof earned a Ph.D. in economics from the Massachusetts Institute of Technology in 1966. And during the 1970s, Akerlof served on the Council of Economic Advisers as well as the Federal Reserve System Board of Governors.
An economics and mathematics major and a Directed Studies alum, Akerlof spent most of his evenings working alongside U.S. Senator Joseph Lieberman ’64 and Washington Post Associate Editor Robert Kaiser ’64 at the Yale Daily News.
“I had a wonderful time being a Newsie,” he said. “But my Econ 1 class met at 8 a.m., and I would fall asleep because I was spending so much time on the Daily. My professor was really surprised when I did well on the final.”
Prior to becoming a senior editor in 1961, Akerlof won an award for the best News story with his article about anti-segregation sit-ins throughout the South.
Akerlof, along with Cardozo Law School Dean Monroe Price ’60 LAW ’64, ventured into the Deep South during the spring of 1960 as the movement for racial integration started gaining momentum throughout the nation. They attended demonstrations, race-related court hearings and speeches in several Southern cities, including Washington, D.C., Montgomery, Ala. and Athens, Ga.
“It was very early to go south,” Akerlof said. “But we got to interview people all over the South and I remember listening to Martin Luther King Jr. do a really rousing speech. It was great experience.”
Price said Akerlof’s recent success could be traced back to their days at the Yale Daily News.
“It’s about close observation of facts,” Price said. “The detailed work that he did on the newspaper supplied a background for his economic studies. I think [the Nobel Prize] is a real tribute to him, and I’m delighted that he won it.”
Since his time at Yale, Akerlof said he enjoys the fact that certain things, such as the campus, have not changed too much, with one notable exception.
“The big thing back then was that there were no girls on campus,” Akerlof said. “Making Yale co-educational is really the best improvement Yale has made since that time.”
But nevertheless, Akerlof said he fondly remembers campus life, such as the football games and the dances, to which girls from sister schools like Vassar College and Smith College were invited.
“It used to be that everyone would go to the football games,” he said. “Especially since there weren’t girls, football weekends were much more important to the social life. The girls would come down for the football games, and then the dance, and then I don’t know what happened…”