Nobel Prize in Economics for the year 1997 was awarded for contribution in the area of

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Q: 83 (IAS/1998)
Nobel Prize in Economics for the year 1997 was awarded for contribution in the area of

question_subject: 

Current Affairs

question_exam: 

IAS

stats: 

0,47,41,13,13,15,47

keywords: 

{'nobel prize': [1, 2, 6, 6], 'international economics': [0, 0, 1, 0], 'financial economics': [0, 1, 0, 0], 'development economics': [0, 1, 0, 1], 'economics': [0, 0, 0, 1], 'public economics': [0, 1, 0, 0], 'contribution': [0, 1, 4, 6]}

The Nobel Prize in Economics for the year 1997 was actually awarded to Robert C. Merton and Myron S. Scholes for a "new method to determine the value of derivatives", which is primarily within the domain of Financial Economics, not Development Economics.

The relevance of each area in the options is as follows:

Option 1 - International Economics concerns the principles and effects of international trade and financial relations. Nobel laureates in this area have generally been mathematicians or macroeconomists.

Option 2 - Financial Economics is the branch of economics studying the decisions of individuals and firms in relation to their financial transactions. The 1997 Nobel laureates developed a formula for pricing options, a financial derivative.

Option 3 - Public Economics examines government taxation and expenditures, and their impact on the economy. It is towards the realm of political economy and fiscal policy.

Option 4 - Development Economics studies economic aspects of the development process in low income countries.

Alert - correct answer should be option- 2 Financial Economics.