Oliver Hart and Bengt Holmstrom wins Nobel in Economics By 2016 – Expansion MX

STOCKHOLM (Reuters) –

The british Oliver Hart and the Finnish Bengt Holmstrom were awarded the Nobel prize in Economics in 2016 for his contributions to the theory of contracts, which has helped me to understand issues such as the salaries of top executives based on performance.

“(His work) introduces the intellectual underpinnings to design policies and institutions in many areas, from bankruptcy legislation to political constitutions,” said the Royal Swedish Academy of Sciences announcing on Monday the prize, worth 8 million Swedish kronor (about 928,000$ ).

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Hart is a professor of Economics at Harvard University, while Holmstrom teaches Economics and Management at the Massachusetts Institute of Technology (MIT, for its acronym in English).

“My first reaction was to hug my woman and wake up my little son,” said Hart, quoted in the official Twitter account of the Nobel prize.

The work of Hart has helped me to understand what companies should be merged and the correct mix of funding, in addition to when they should be publicly owned or private institutions such as schools, said the Academy in a statement.

The work of Holmstrom, for their part, helped to formulate contracts for executives, added the statement.

The prize in Economics, officially called the Prize, Sveriges Riksbank in Economic Sciences in memory of Alfred Nobel, was established in 1968. It was not part of the original prizes the magnate of dynamite established in his will in 1895.

The Economy is the fifth of the Nobel prizes failed this year. Last week it was announced the Medicine, Physics, Chemistry and the Peace prize. The Literature will be known on Thursday.