France’s Jean Tirole wins 2014 Nobel Prize for Economics

His work is credited with helping drive the deregulation of industries in developed economies in the 1980s and 1990s, when many sectors were dominated by state-owned companies or monopolies. More recently, however, Tirole has argued for stronger regulation of banks in the wake of the global financial crisis.

“Jean Tirole is one of the most influential economists of our time,” the award-giving body said. “Most of all he has clarified how to understand and regulate industries with a few powerful firms.”

The economist will receive an 8 million Swedish crown ($1.1 million, €875,000) prize.

Tirole, 61, works at the Toulouse School of Economics in France and has a Ph.D. from Massachusetts Institute of Technology.

“From the mid-1980s and onwards, Jean Tirole has breathed new life into research on such market failures,” the academy said, adding his work has strong bearing on how governments deal with mergers or cartels and how they should regulate monopolies.

“In a series of articles and books, Jean Tirole has presented a general framework for designing such policies and applied it to a number of industries, ranging from telecommunications to banking,” the academy said.

First non-American to win

It was the first economics prize without an American winner since 1999.

“I must confess that I haven't yet touched the ground again after the phone call from Stockholm,” Tirole told a news conference in Toulouse on Monday afternoon. “This is an extraordinary experience, and I am very happy.”

Before Tirole, the academy said, policy-makers advocated simple rules including capping prices for companies with a monopoly and banning cooperation between competitors. Tirole showed that in some circumstances, such rules can do more harm than good.

Drawing on insights based on Tirole’s work, “governments can better encourage powerful firms to become more productive and, at the same time, prevent them from harming competitors and customers,” the academy said.

The economics prize concluded the 2014 Nobel Prize announcements. Officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel’s 1895 will.

(FRANCE 24 with AP, REUTERS)