A Top Econ Prize for a Theory That Works

What do people think economic theorists do? The pundits who regularly criticize the profession, particularly in the pages of British magazines, seem to think that they spend all their time making abstruse, unrealistic theories about how free markets are the best of all possible worlds. And it's true that there are still a few economists out there who are essentially doing that. But a lot of theorists are doing something much more humble and practical work on small-bore theories that can be immediately applied to make the real world a little more efficient.

Parag Pathak is a theorist of this latter type. The Massachusetts Institute of Technology professor last month was awarded the John Bates Clark medal, which is awarded to an economist under age 40 and is considered the second most prestigious award in the field after the Nobel. Although the Clark medal isn’t given for any specific achievement, the prize cited Pathak’s work on improving “the assignment of students to public schools.” And he did it with economic theory.