New York, NY - January 4, 2010 - The TIAA-CREF Institute is pleased to announce the winners of the fourteenth annual TIAA-CREF Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security. George A. Akerlof, Koshland Professor of Economics, University of California, Berkeley and Robert J. Shiller, Arthur M. Okun Professor of Economics, Yale University were recognized for their book, “Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism” (Princeton University Press).
“Akerlof and Shiller’s compelling book regarding how powerful forces of human psychology contribute to our economy ties directly into the underlying goals of the TIAA-CREF Samuelson Award,” said Madeleine d’Ambrosio, Vice President and Executive Director, TIAA-CREF Institute. “The award was designed to encourage and recognize thorough examination of economic principles and theory that can help inform policy decisions and improve financial security for individuals and their families.”
The authors examine financial market phenomena in light of John Maynard Keynes’ famous claim that psychological forces or “animal spirits” help drive the economy. They conclude that these forces provide a plausible explanation for the often-volatile activity that plagues financial markets and offer insights for policymakers seeking to stabilize the economy.
Akerlof and Shiller present significant evidence on how psychology helps explain economic behavior in the banking, real estate and financial markets, and conclude that the government should play a more active role in guiding and stabilizing the economy. They contend that carefully monitored government regulations would help financial service professionals manage portfolios more effectively by introducing greater stability into the markets, and ultimately help individuals seeking to plan and accumulate a steady lifetime income by reducing the likelihood of dramatic swings in portfolio values.
“The events of 2008 and 2009 have been a dramatic reminder that macroeconomic conditions and financial markets interact in ways we do not fully understand. “Animal Spirits” presents a lucid analysis of the interplay between them,” said Luis M. Viciera, George E. Bates Professor, Harvard Business School, and a member of the independent panel of Samuelson Award judges. “This book should be a starting point, not an end point, to continue a debate that hopefully will lead to a much better understanding of uncertainty in macroeconomics and of the interrelation of macroeconomics and finance, and with that to improved policy making, regulation, and savings-product design.”
Professor Akerlof received his B.A. from Yale University and his Ph.D. from MIT. Currently, in addition to his position at the University of California, Berkeley, he is a Senior Fellow at The Brookings Institution. He was the 2001 Nobel Laureate in Economics for his theory of asymmetric information and its effect on economic behavior. He was the 2006 President of the American Economic Association and served earlier as vice president and a member of its executive committee. He is also on the North American Council of the Econometric Association. Akerlof is perhaps best known for his article "The Market for Lemons: Quality Uncertainty and the Market Mechanism" published in the Quarterly Journal of Economics in 1970, in which he identified certain severe problems that afflict markets characterized by asymmetrical information.
Dr. Shiller received his B.A. from the University of Michigan and his Ph.D. in economics from MIT. He has written on financial markets, financial innovation, behavioral economics, macroeconomics, real estate, statistical methods, and on public attitudes, opinions, and moral judgments regarding markets. "Paul Samuelson was a teacher of both George and me, and a deep influence on our lives' work. He gave us direction that led eventually to this book. We are most grateful that the TIAA-CREF Institute has chosen to grant us this award in his honor," said Dr. Shiller.
He has been a research associate at National Bureau of Economic Research (NBER) since 1980, and has been co-organizer of NBER workshops on behavioral finance with Richard Thaler since 1991, and on macroeconomics and individual decision making (behavioral macroeconomics) with George Akerlof since 1994. He is also a TIAA-CREF Institute Fellow. Dr. Shiller won the first TIAA-CREF Paul A. Samuelson Award in 1996 for his book “Macro Markets.” Shiller is also the best-selling author of “Irrational Exuberance” and “The Subprime Solution” (both Princeton University Press).
The award is named after Nobel Prize winner Paul A. Samuelson in honor of his achievements in the field of economics, as well as for his service as a CREF trustee from 1974-1985. The TIAA-CREF Institute will present the award to Akerlof and Shiller on January 3, 2010 in Atlanta, GA during the Allied Social Science Associations annual meeting.
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $402 billion in combined assets under management (as of 9/30/09). TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
About the TIAA-CREF Institute
The mission of the TIAA-CREF Institute, part of TIAA-CREF, is to foster objective research, build knowledge, support thought leadership, and enhance understanding of strategic issues related to higher education and lifelong financial security. For additional information regarding the TIAA-CREF Paul A. Samuelson Award and other TIAA-CREF Institute initiatives and research, please visit www.tiaa-crefinstitute.org.
TIAA-CREF Institute is a division of Teachers Insurance and Annuity Association (TIAA), New York, NY.
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