The BBVA Foundation Frontiers of Knowledge Award in Economics, Finance and Management goes, in this ninth edition, to Daron Acemoglu for his fundamental contributions to the economics of growth and development.
In a series of writings that include multiple journal papers and books, he and his coauthors highlighted the important role of institutions in economic development. One of his best known papers used differences in the mortality rates and settlement patterns of European colonizers across colonies to identify exogenous variation in the adoption of institutions, and to show that differences in institutions have had a significant causal impact on colonies’ economic development. This work has established that, contrary to an influential earlier hypothesis, geography alone cannot explain differences in economic development.
His prolific research employs an innovative mix of theory, historical data, and sophisticated econometric analysis, is widely cited, and has been influential not only in economics, but also in political science, history, and social sciences more broadly.
Daron Acemoglu has made substantial contributions on the theoretical front as well. He showed how directed technical change can explain a number of puzzling observations such as the concomitant increases in the wages of skilled workers and their supply. He also showed that unemployment insurance, while encouraging the search for higher-wage jobs, need not reduce output. Recently, he has worked extensively on the economics of networks.