Robert C. Merton, a Research Associate in the NBER's Program on Asset Pricing and professor of economics at Harvard Business School, and Myron S. Scholes, a professor emeritus at Stanford Business School and a former NBER Research Associate, won the Nobel Prize in Economics this year.
The Royal Swedish Academy of Sciences awarded the prize to Merton and Scholes for helping to devise a mathematical formula aimed at measuring the worth of an option. "Thousands of traders and investors now use this formula every day to value stock options in markets throughout the world," the Academy said in its announcement. Options are contracts that allow, but do not require, an investor to buy an asset, like a stock or oil, at a fixed price during a specified period of time.
Robert E. Lucas, Jr. and Robert W. Fogel, both NBER Research Associates and professors of economics at the University of Chicago, won the prize in 1995 and 1993, respectively. Other researchers who have been affiliated with the NBER over the years and won the Nobel Prize in Economics are Simon S. Kuznets, Milton Friedman, Theodore W . Schultz, George J. Stigler, and Gary S. Becker.
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