Yuliy Sannikov Wins John Bates Clark Young Economist Awardby
Annual award given to American economist under the age of 40
Fed Chair Yellen cited Sannikov's work in 2014 IMF speech
Yuliy Sannikov, a professor at Princeton University, won the John Bates Clark young economist award.
Sannikov was honored for theoretical work that has expanded the ability of economists to analyze a whole range of issues from the design of securities to collusion in markets, the Nashville, Tennessee-based American Economic Association said Friday in a statement on its website.
“Sannikov’s work is impressive,” the AEA said. “It is elegant, powerful, and it paves the way for further analysis on lots of problems.”
Alan Blinder, a fellow professor at Princeton and a former Federal Reserve vice chairman, said Sannikov “has displayed an unusual ability to apply deep economic theory to important questions about monetary policy and the financial system.”
Fed Chair Janet Yellen cited his work with Markus Brunnermeier, another Princeton professor, in a speech she gave at the International Monetary Fund in 2014. In a footnote, Yellen said the two economists had developed an economic model to explore whether long periods of relative economic stability led to excessive risk-taking and financial imbalances that damaged the economy when they were unwound.
In a presentation to the Kansas City Fed’s Jackson Hole symposium in 2012, Brunnermeier and Sannikov argued that central bankers can’t just focus on achieving stable prices.
"Policy rules that ignore financial stability fail to lean against the buildup of imbalances and systemic risk in normal times and are not credible in crisis times," they said.
They also highlighted the impact that monetary policy can have on the distribution of wealth in a society -- a sore point among some critics of the Fed who have accused it of pursuing strategies that benefited investors without helping ordinary Americans.
Brunnermeier said in an interview that he and Sannikov were able to provide a "totally different picture" of how the economy operates by focusing on frictions in the financial system.
In particular, they were able to explain and explore how a small shock can at times have outsized economic impacts as it feeds on itself. In addition, they were better able to analyze the effects of quantitative easing, he said.
Sannikov also has studied the best way to structure incentive contracts to avoid rewarding corporate executives, private equity managers and others for work today that ends up being damaging in the longer run.
He earned a bachelor’s degree in mathematics from Princeton in 2000, then went on to get a Ph.D. in business administration four years later from Stanford University. He won three gold medals in the International Mathematical Olympiads in 1994 to 1996, according to his resume.
His research interests include game theory, corporate finance and macroeconomics.
Started in 1947 as a biennial prize, the John Bates Clark award is now being given annually to the American economist under 40 who is judged to have made “the most significant contribution to economic thought and knowledge,” according to the association.
Past winners of the accolade include the late Nobel laureate Milton Friedman, New York Times columnist and City University of New York professor Paul Krugman; and Lawrence Summers, a former Treasury secretary and ex-director of President Barack Obama’s National Economic Council. Data compiled by Bloomberg show that recipients of the medal have about a one-in-three chance of eventually winning the Nobel Prize in economics.
Roland Fryer, a professor at Harvard University, won the John Bates Clark prize last year for his work on the economics of race and education.