George Arthur Akerlof (born June 17, 1940) is an American economist and a university professor at the McCourt School of Public Policy at

Georgetown University Georgetown University is a private university, private Jesuit research university in Washington, D.C., United States. Founded by Bishop John Carroll (archbishop of Baltimore), John Carroll in 1789, it is the oldest Catholic higher education, Ca ...

and Koshland Professor of Economics Emeritus at the

University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...

. Akerlof was awarded the 2001

Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (), commonly referred to as the Nobel Prize in Economics(), is an award in the field of economic sciences adminis ...

, jointly with

Michael Spence Andrew Michael Spence (born November 7, 1943) is a Canadian-American economist and Nobel laureate. Spence is the William R. Berkley Professor in Economics and Business at the Stern School of Business at New York University, and the Philip H. Kn ...

and

Joseph Stiglitz Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, political activist, and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2 ...

, "for their analyses of markets with asymmetric information." He is the husband of former

United States Secretary of the Treasury The United States secretary of the treasury is the head of the United States Department of the Treasury, and is the chief financial officer of the federal government of the United States. The secretary of the treasury serves as the principal a ...

Janet Yellen Janet Louise Yellen (born August 13, 1946) is an American economist who served as the 78th United States secretary of the treasury from 2021 to 2025. She also served as chair of the Federal Reserve from 2014 to 2018. She was the first woman to h ...

Early life and education

Akerlof was born in

New Haven, Connecticut New Haven is a city of the U.S. state of Connecticut. It is located on New Haven Harbor on the northern shore of Long Island Sound. With a population of 135,081 as determined by the 2020 United States census, 2020 U.S. census, New Haven is List ...

, on June 17, 1940, into a Jewish family. His mother was Rosalie Clara Grubber (née Hirschfelder), a housewife of

German Jewish The history of the Jews in Germany goes back at least to the year 321 CE, and continued through the Early Middle Ages (5th to 10th centuries CE) and High Middle Ages (c. 1000–1299 CE) when Jewish immigrants founded the Ashkenazi Jewish commu ...

descent, and his father was Gösta Carl Åkerlöf, a chemist and inventor, who was a Swedish immigrant. "The Princeton Country Day School ended at grade nine. At that point most of my classmates dispersed among different New England prep schools. Both for financial reasons and also because they preferred that I stay at home, my family sent me down the road to the Lawrenceville School." George has an older brother,

Carl Carl may refer to: *Carl, Georgia, city in USA *Carl, West Virginia, an unincorporated community *Carl (name), includes info about the name, variations of the name, and a list of people with the name *Carl², a TV series * "Carl", an episode of tel ...

, a physics professor at the

University of Michigan The University of Michigan (U-M, U of M, or Michigan) is a public university, public research university in Ann Arbor, Michigan, United States. Founded in 1817, it is the oldest institution of higher education in the state. The University of Mi ...

. Akerlof attended

Princeton Day School Princeton Day School is a private coeducational day school located in Princeton, in Mercer County, in the U.S. state of New Jersey, serving students in pre-kindergarten through twelfth grade. The largest division is the Upper School (grades 9� ...

, before he graduated from the

Lawrenceville School The Lawrenceville School is a Private school, private, coeducational College-preparatory school, preparatory school for boarding and day students located in the Local government in New Jersey, unincorporated community of Lawrenceville, New Jers ...

in 1958. He received a

bachelor's A bachelor's degree (from Medieval Latin ''baccalaureus'') or baccalaureate (from Modern Latin ''baccalaureatus'') is an undergraduate degree awarded by colleges and universities upon completion of a course of study lasting three to six years ( ...

in economics from

Yale University Yale University is a Private university, private Ivy League research university in New Haven, Connecticut, United States. Founded in 1701, Yale is the List of Colonial Colleges, third-oldest institution of higher education in the United Stat ...

in 1962, and earned his

PhD A Doctor of Philosophy (PhD, DPhil; or ) is a terminal degree that usually denotes the highest level of academic achievement in a given discipline and is awarded following a course of graduate study and original research. The name of the deg ...

in economics from the

Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a Private university, private research university in Cambridge, Massachusetts, United States. Established in 1861, MIT has played a significant role in the development of many areas of moder ...

(MIT) in 1966. His dissertation was titled ''Wages and Capital'' under the supervision of

Robert Solow Robert Merton Solow, GCIH (; August 23, 1924 – December 21, 2023) was an American economist who received the 1987 Nobel Memorial Prize in Economic Sciences, and whose work on the theory of economic growth culminated in the exogenous growth ...

, a noted economist who would later receive the Nobel Memorial Prize.

Academic career

After receiving his doctorate, Akerlof joined the faculty of the

, as an assistant professor of economics, although he taught for only one year before moving to India. In 1967, he spent some time as a visiting professor at the

Indian Statistical Institute The Indian Statistical Institute (ISI) is a public research university headquartered in Kolkata, India with centers in New Delhi, Bengaluru, Chennai and Tezpur. It was declared an Institute of National Importance by the Government of India und ...

(ISI) in New Delhi and returned to the United States in September 1968. Akerlof then became an associate professor at Berkeley and voted for a tenure-track position at the university. He also served as a senior economist at the White House

Council of Economic Advisers The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the president of the United States on economic policy. The CEA provides much of the empirical resea ...

(CEA) from 1973 to 1974. In 1977, Akerlof spent a year as a visiting research economist for the

Federal Reserve Board of Governors The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement the mo ...

in Washington, D.C. where he met his future wife and coauthor,

. After that he hoped to be promoted to full professorship, however, Berkeley's department of economics failed to appoint him. Akerlof and Yellen then moved to the

London School of Economics The London School of Economics and Political Science (LSE), established in 1895, is a public research university in London, England, and a member institution of the University of London. The school specialises in the social sciences. Founded ...

(LSE) in 1978, where he accepted a prestigious post as the Cassel Professor of Money and Banking, while she accepted a tenure-track lectureship. They remained in the United Kingdom for two years before returning to the United States. In 1980, Akerlof becomes Goldman Professor of Economics at Berkeley and taught there for most of his career. In 1997, he took a

leave of absence The labour law concept of leave, specifically paid leave or, in some countries' long-form, a leave of absence, is an authorised prolonged absence from work, for any reason authorised by the workplace. When people "take leave" in this way, they ar ...

from Berkeley to accompany his wife when she was named chair of the Council of Economic Advisers (CEA). At Washington, Akerlof began working for the

Brookings Institution The Brookings Institution, often stylized as Brookings, is an American think tank that conducts research and education in the social sciences, primarily in economics (and tax policy), metropolitan policy, governance, foreign policy, global econo ...

as a senior fellow. They both returned to teaching at UC Berkeley in 1999. Akerlof remained an active faculty member at the university until his retirement. He was awarded Koshland Professor of Economics Emeritus in 2010. After that, he once again moved to Washington when Yellen confirmed to the Federal Reserve Board. Akerlof received a position as visiting scholar at the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...

(IMF) from 2010 to 2014 and joined the McCourt School of Public Policy at

as a university professor in 2014.

Contributions to economics

"The Market for Lemons" and asymmetric information

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 ''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan ...

'' in 1970, in which he identified certain severe problems that afflict markets characterized by

asymmetric information In contract theory, mechanism design, and economics, an information asymmetry is a situation where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can sometimes c ...

, the paper for which he was awarded the Nobel Memorial Prize. In ''Efficiency Wage Models of the Labor Market'', Akerlof and coauthor/wife, Janet Yellen propose rationales for the efficiency wage hypothesis in which employers pay above the

market-clearing In economics, market clearing is the process by which, in an economic market, the supply of whatever is traded is equated to the demand so that there is no excess supply or demand, ensuring that there is neither a surplus nor a shortage. The new ...

wage, in contradiction to the conclusions of

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a go ...

. This work introduced gift-exchange game to economics.

Identity economics

Akerlof and collaborator

Rachel Kranton Rachel E. Kranton (born c. 1962) is an American economist and James B. Duke Professor of Economics at Duke University. She is a member of the National Academy of Sciences, the American Academy of Arts & Science, Fellow of the Econometric Society, ...

of Duke University have introduced social identity into formal economic analysis, creating the field of

identity economics Identity economics captures the idea that people make economic choices based on both monetary incentives and their identity: holding monetary incentives constant, people avoid actions that conflict with their concept of self. The fundamentals of id ...

. Drawing on

social psychology Social psychology is the methodical study of how thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others. Although studying many of the same substantive topics as its counterpart in the field ...

and many fields outside of economics, Akerlof and Kranton argue that individuals do not have preferences only over different goods and services. They also adhere to

social norms A social norm is a shared standard of acceptance, acceptable behavior by a group. Social norms can both be informal understandings that govern the behavior of members of a society, as well as be codified into wikt:rule, rules and laws. Social norma ...

for how different people should behave. The norms are linked to a person's social identities. These ideas first appeared in their article "Economics and Identity", published in the ''Quarterly Journal of Economics'' in 2000.

Reproductive technology shock

In the late 1970s, Akerlof's ideas attracted the attention of some on both sides of the debate over legal

abortion Abortion is the early termination of a pregnancy by removal or expulsion of an embryo or fetus. Abortions that occur without intervention are known as miscarriages or "spontaneous abortions", and occur in roughly 30–40% of all pregnan ...

. In articles appearing in The ''

'', ''

The Economic Journal ''The Economic Journal'' is a peer-reviewed academic journal of economics published on behalf of the Royal Economic Society by Oxford University Press. The journal was established in 1891 and publishes papers from all areas of economics.The edito ...

'', and other forums, Akerlof described a phenomenon that he labeled "''reproductive technology shock.''" He contended that the new technologies that had helped to spawn the late twentieth century

sexual revolution The sexual revolution, also known as the sexual liberation, was a social movement that challenged traditional codes of behavior related to sexuality and interpersonal relationships throughout the Western world from the late 1950s to the early 1 ...

, modern contraceptives and legal abortion, had not only failed to suppress the incidence of out-of-wedlock childbearing but also had actually worked to increase it. According to Akerlof, for women who did not use them, these technologies had largely transformed the old paradigm of socio-sexual assumptions, expectations, and behaviors in ways that were especially disadvantageous. For example, the availability of legal abortion now allowed men to view their offspring as the deliberate product of female choice rather than as the joint product of sexual intercourse. Thus, it encouraged biological fathers to reject not only the notion of an obligation to marry the mother but also the idea of a paternal obligation. While Akerlof did not recommend legal restrictions on either abortion or the availability of contraceptives his analysis seemed to lend support to those who did. Thus, a scholar strongly associated with liberal and Democratic-leaning policy positions has been approvingly cited by conservative and Republican-leaning analysts and commentators.

Looting

In 1993 Akerlof and

Paul Romer Paul Michael Romer (born November 6, 1955) is an American economist and policy entrepreneur who is a Seidner University Professor in Finance at Boston College. Romer is best known as the former Chief Economist of the World Bank and for co- ...

published "Looting: The Economic Underworld of Bankruptcy for Profit", describing how under certain conditions, owners of corporations will decide it is more profitable for them personally to 'loot' the company and 'extract value' from it instead of trying to make it grow and prosper. For example:

Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations. Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations.

Norms and macroeconomics

In his 2007 presidential address to the

American Economic Association The American Economic Association (AEA) is a learned society in the field of economics, with approximately 23,000 members. It publishes several peer-reviewed journals, including the Journal of Economic Literature, American Economic Review, an ...

, Akerlof proposed ''natural norms'' that decision makers have for how they ''should'' behave, and showed how such norms can explain discrepancies between theory and observed facts about the macroeconomy. Akerlof proposed a new agenda for macroeconomics, using social norms to explain macroeconomic behavior. He is considered together with

Gary Becker Gary Stanley Becker (; December 2, 1930 – May 3, 2014) was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences. He was a professor of economics and sociology at the University of Chicago, and was a leader of ...

as one of the founders of

social economics Economics () is a behavioral science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyse ...

. He is a trustee of

Economists for Peace and Security Economists for Peace and Security (EPS) is a New York–based, United Nations accredited and registered global organization and network of thought-leading economists, political scientists, and security experts founded in 1989 that promotes non-mili ...

and co-director of the Social Interactions, Identity and Well-Being Program at the

Canadian Institute for Advanced Research The Canadian Institute for Advanced Research (CIFAR) is a Canadian-based global research organization that brings together teams of top researchers from around the world to address important and complex questions. It was founded in 1982 and is su ...

(CIFAR). He is on the advisory board of the

Institute for New Economic Thinking The Institute for New Economic Thinking (INET) is a New York City–based nonprofit think tank. It was founded in October 2009 as a result of the Great Recession, and runs a variety of affiliated programs at major universities such as the Cambr ...

. He was elected a fellow of the

American Academy of Arts and Sciences The American Academy of Arts and Sciences (The Academy) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, and other ...

in 1985. For his work and contribution to economics and philosophy, he was awarded the third Witten Lectures in Economics and Philosophy at the Witten/Herdecke University in 2009.

Political views

In June 2024, 16

Nobel Prize in Economics The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (), commonly referred to as the Nobel Prize in Economics(), is an award in the field of economic sciences adminis ...

laureates, including Akerlof, signed an open letter arguing that

Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...

’s fiscal and trade policies coupled with efforts to limit the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...

's independence would reignite inflation in the United States.

Personal life

Akerlof was briefly married to an architect, Kay Leong; they wed in 1974 and divorced three years later, after he did not get promoted to a full professorship at Berkeley. Following their divorce, Kay moved to New York and remarried a fellow architect. In 1978, Akerlof married

, an economist who was the former

and former

chair of the Federal Reserve The chair of the Board of Governors of the Federal Reserve System is the head of the Federal Reserve, and is the active executive officer of the Federal Reserve Board of Governors, Board of Governors of the Federal Reserve System. The chairman p ...

, as well as a professor emeritus at Berkeley's

Haas School of Business The Walter A. Haas School of Business (branded as Berkeley Haas) is the business school of the University of California, Berkeley, a Public university, public research university in Berkeley, California. It was the first business school at a pub ...

. They have one child, a son named Robert, who was born in 1981. Robert Akerlof is also an economist, earned a bachelor's degree in economics and mathematics from Yale University and obtained his PhD in economics from

Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...

, currently working as an associate professor of economics at the

University of Warwick The University of Warwick ( ; abbreviated as ''Warw.'' in post-nominal letters) is a public research university on the outskirts of Coventry between the West Midlands and Warwickshire, England. The university was founded in 1965 as part of ...

. Akerlof was one of the signees of a 2018 ''amici curiae'' brief that expressed support for Harvard in the ''

Students for Fair Admissions v. President and Fellows of Harvard College ''Students for Fair Admissions v. Harvard'', 600 U.S. 181 (2023), is a List of landmark court decisions in the United States, landmark decision of the Supreme Court of the United States, United States Supreme Court ruling that race-based Affirmat ...

'' lawsuit. Other signees of the brief include

Alan B. Krueger Alan Bennett Krueger (September 17, 1960 – March 16, 2019) was an American economist who was the James Madison Professor of Political Economy at Princeton University and Research Associate at the National Bureau of Economic Research. He served ...

, Cecilia E. Rouse, Robert M. Solow, Janet L. Yellen, as well as numerous others.

Bibliography

* * Akerlof, George A., and

. 1986. ''Efficiency Wage Models of the Labor Market''. Orlando, Fla.: Academic Press. * Akerlof, George A., Romer, Paul M., Brookings Papers on Economic Activity, "Looting: The Economic Underworld of Bankruptcy for Profit" Vol. 1993, No. 2 (1993), pp. 1–73 * Akerlof, George A. 2000. "Economics and Identity," ''Quarterly Journal of Economics'', 115(3), pp
715–53.
* Akerlof, George A. 2005. ''Explorations in Pragmatic Economics'', Oxford University Press. . * Akerlof, George A. 2005. "Identity and the Economics of Organizations," ''Journal of Economic Perspectives'', 19(1), pp
9–32.
* Akerlof, George A.
Thoughts on global warming
"

chinadialogue Dialogue Earth, formerly China Dialogue (), is an independent, non-profit organisation based in London. It was launched on July 3, 2006. Dialogue Earth is funded by a range of institutional supporters, including several major charitable foundations ...

(2006). 14 July 2008. * Akerlof, George A. and

Robert J. Shiller Robert James Shiller (born March 29, 1946) is an American economist, academic, and author. As of 2022, he served as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center fo ...

. 2009. '' Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism''. Princeton, New Jersey: Princeton University Press. . * Akerlof, George A., and Rachel E. Kranton. 2010. ''Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being'', Princeton, New Jersey: Princeton University Press.
Description & TOC
"Introduction," pp
3–8
an
preview.
* George A. Akerlof and

. 2015. ''Phishing for Phools: The Economics of Manipulation and Deception'', Princeton University Press. .

References

External links

Official

George A. Akerlof
at

* including the Nobel Prize Lecture December 8, 2001 ''Behavioral Macroeconomics and Macroeconomic Behavior''
Identity Economics

Other

Biography
at

Encyclopædia Britannica The is a general knowledge, general-knowledge English-language encyclopaedia. It has been published by Encyclopædia Britannica, Inc. since 1768, although the company has changed ownership seven times. The 2010 version of the 15th edition, ...

Profile
an

at

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/RePEc * ;Articles
Akerlof's criticism of Bush
February 12, 2003

July 29, 2003 {{DEFAULTSORT:Akerlof, George 1940 births Living people 20th-century American economists 21st-century American economists Academics of the London School of Economics American Nobel laureates American people of German-Jewish descent American people of Swedish descent Distinguished fellows of the American Economic Association Economists from Connecticut Economists from New Jersey American expatriate academics in the United Kingdom Fellows of the American Academy of Arts and Sciences Fellows of the Econometric Society Information economists Institute for New Economic Thinking Jewish American economists American labor economists Lawrenceville School alumni Massachusetts Institute of Technology alumni McCourt School of Public Policy faculty Members of the United States National Academy of Sciences National Bureau of Economic Research New Keynesian economists Nobel laureates in Economics People from Princeton, New Jersey Presidents of the American Economic Association Russell Sage Foundation People from New Haven, Connecticut University of California, Berkeley College of Letters and Science faculty Yale College alumni