I wish to thank the Commissioner Silver, Ambassador Aas and Ambassador Lyrvall for sponsoring this event. We have had an amazing year, me and my family. I would like to take this opportunity to comment on two things:
1. I was most definitely what can be called a late bloomer. I benefitted greatly form the American flexible public education system and my parents' patience and understanding; intellectual maturity and development seldom conform to a uniform age profile. In my case, my high school performance was erratic and my main distinction was a formal report by a teacher that I failed to respect authority. College was different: to this day, I remember some generous teachers that helped me turn my college years into something special.
2. The bundling of my award with Gene Fama and Bob Shiller and the media spin on this award have provoked me to discuss some important issues related to research in economic and other disciplines. There was a common component to our diverse research accomplishments. Looking systematically at empirical evidence from financial markets and the macroeconomy led us to expose defects in existing economic models which in turn nurtured searches for new and better models.
Uncertainty about model specifications in economic dynamics is understood in the best academic discourse but often missed in discussions of implications for public policy. Policy discussions often should include what works well across a variety of model specifications adopted to reflect well our state of knowledge. Uncertainty and people's responses to it should be acknowledged and explored, not avoided. Unfortunately too often the media and policy-makers expect economists to deliver predictions with confidence and precision even when it is not justified by what we can measure. I feel that we all need to be more tolerant of cautious statements and be more explicit about encouraging wise strategies to cope with uncertainty; there is no crystal ball that enables any of us to see the future.