NBER Reporter: Fall 97
Merton Shares '97 Nobel
Robert C. Merton, a Research Associate
in the NBER's Program on Asset
Pricing and professor of economics
at Har vard 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
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
stO'ck 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.