Joseph E. Stiglitz '64, a professor at Columbia University, who has served as an Amherst Trustee since July 2000, was one of three economists awarded the 2001 Nobel Memorial Prize in Economic Science in October. He and the others, George A. Akerlof of the University of California at Berkeley and A. Michael Spence of Stanford University, were honored for their work describing how imperfect or "asymmetric" information available to sellers and buyers can disrupt competitive equilibrium in the marketplace.
Stiglitz has cited, for example, the financial marketplace, in which people would buy corporate stock without sufficient knowledge to determine proper value if it weren't for the full disclosure requirements of the Securities and Exchange Commission.
The Nobel laureates' research, conducted mostly in the 1960s and '70s, persuaded many economists that government must often play a strong, corrective role in market systems. Stiglitz told The New York Times that, in selecting this year's winners, the Nobel committee reflected "where much of mainstream economics is today, which is that competitive equilibrium is not a useful model." In making its award, the Royal Swedish Academy of Sciences said the three laureates' "contributions form the core of modern information economics," and that Stiglitz "is probably the most cited researcher within the information economics literature—perhaps also within a wider domain of microeconomics."
Stiglitz became a professor at Columbia earlier this year after being a member of the Stanford University faculty for 13 years. He served as a member and then as chairman of President Clinton's Council of Economic Advisors from 1993 to 1997, and as chief economist of the World Bank from 1997 through 1999.
One of Stiglitz's teachers at Amherst, Ralph E. Beals, Clarence Francis Professor of Economics, said his former student "ranks among the very best economists certainly of his generation and has had vastly more influence than most economists of any time."
Stiglitz is the third Amherst alumnus to win a Nobel Prize. Harold E. Varmus '61, now president and chief executive officer of the Memorial Sloan-Kettering Cancer Center in New York City, was one of two scientists who won the 1989 Nobel Prize in medicine for their discovery that cancer genes in certain viruses are altered forms of normal animal genes. And the late Henry W. Kendall, who was a professor at M.I.T. and chairman of the Union of Concerned Scientists, was among researchers who won the 1990 Nobel Prize in physics for work providing the first experimental evidence for sub-nuclear particles called quarks.