Outlook: Nobel prize

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THE ROYAL Swedish Academy of Sciences, which awards the Nobel prize for economics, seems to be the most dreadful follower of fashion, doesn't it? Last year it awarded the accolade to Myron Scholes and Robert Merton for developing the formula that led to the explosive growth in financial derivatives over the past ten years.

The two laureates then went on to become partners in John Meriwether's Long-Term Capital Management, and in the process came within a whisker of bringing about a total collapse in the global financial system.

So, as if by way of punishment, the venerable Swedes have this year gone full circle and awarded the prize to a man whose reputation has been earned studying poverty and wealth redistribution, Amartya Sen. The carnivores have been replaced by a gentle, grass- eating herbivore. As they say, what goes round comes round.