The First Carl Menger Prize Awarded!

The Verein für Socialpolitik is currently the largest association of German-speaking economists in the world.  It was founded in 1873 by economists of the German historical school and was chaired for many years by their leader Gustav Schmoller, who was a bitter opponent of Carl Menger  and the nascent Austrian school.  Well times have certainly changed. At its latest meeting a few weeks ago, the Verein awarded its first Carl-Menger-Prize to Hélène Rey, Professor of Economics in the London Business School.  The newly established Menger Prize is co-sponsored by the German, Austrian, and Swiss central banks and is awarded every two years to an economist no older than 45 “in recognition of excellent research into monetary macroeconomics, monetary policy and foreign exchange policy.” In one of her more influential papers, Professor  Rey advocates stricter macroprudential regulations, tighter leverage ratios and, in certain cases, capital controls.  She does however, recognize a powerful global financial cycle in capital flows, credit creation, and assets prices, although she seems to connect this with fluctuations in  uncertainty and risk aversion rather than central bank monetary policies. Despite some reservations about her scientific analysis and policy advice,  congratulations are in order to Professor Rey on her award.   Contemporary Austrians also owe a debt of gratitude to the Verein für Socialpolitik for so generously drawing attention to Menger’s legacy by naming a scientific prize in his honor.