October 12th, 2009
02:56 PM ET

Financial Dispatch: Two Americans win Nobel Prize for Economics

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/WORLD/europe/10/12/nobel.economics/art.econ.nobels.iu.ucb.jpg caption="U.S. professors Elinor Ostrom and Oliver Williamson are joint recipients of the Nobel Prize for economics."]

Andrew Torgan
CNN Financial News Producer

Two American scholars who are experts in how businesses and the economy are regulated have won the 2009 Nobel Prize in Economics.

Elinor Ostrom, a professor at Indiana University, is the first woman ever to win the Nobel in Economics.

Ostrom will share the $1.4 million prize with Oliver E. Williamson, a retired professor at the University of California-Berkeley.

The issue of government control of the economy has become a significant issue since last year's financial meltdown. The Obama Administration and governments of major developed economies around the globe are now working reform their regulatory oversight of businesses and markets.

Ostrom, a professor of political science, was recognized for her work demonstrating how common property, such as forests and lakes, can be successfully managed by those who use the resources, rather than government officials.

As for Williamson, the Nobel committee said his theories show that large private corporations exist primarily because they can be the most efficient way to complete some economic transactions, challenging the belief that markets are always the most rational and efficient way to conduct business.

Survey says… the recession is over

More than 80% of top economists believe that the recession that started almost two years ago is finally over. But most don't expect meaningful improvement in jobs, credit or housing for months to come.

That's according to a survey released Monday by the National Association for Business Economics. The group asked 43 top economists last month if they believe the battered economy has pulled out of the worst U.S. downturn since World War II.

Thirty-five respondents, or 81%, believe the recovery has begun. Only four, or 9%, believe the economy is still in a recession. The other four say they're uncertain.

Economists in the survey forecast that the economy grew at an annual rate of 3% in the three months that ended in September, though the official reading of gross domestic product won't be out for weeks.

And all of the economists surveyed expect the recovery to be slow and painful, leaving many people and businesses feeling the effects of the downturn for years to come.

The only organization that can officially declare the beginning or the end of a recession is the National Bureau of Economic Research. But that group doesn't make any sort of declaration until months after the fact, in order to take into account final readings of various economic measures such as employment, income and industrial production. For example, the NBER didn't declare that the recent recession had begun in December 2007 until a full year after the fact.

Big Week on Wall Street

The stalled-out stock-market rally got a reboot last week, pushing the Dow and S&P 500 to fresh one-year highs. But that resilience will be tested in the week ahead with the release of the first big batch of third-quarter financial results.

Dow components Bank of America, JPMorgan Chase, IBM, Intel, Johnson & Johnson and General Electric are all on tap. Google, Nokia, Citigroup and Goldman Sachs are among the other big names due to report.

Today, with no economic or major earnings news on the docket, stocks are making some fairly solid advances, with the Dow topping 9,900 for the first time in more than a year.

Senate considers benefits extension

The Senate may vote this week on whether to extend unemployment benefits to the millions of jobless workers across the country.

This after Senate Democrats reached a deal to give an additional 14 weeks to workers in all 50 states, and 6 weeks on top of that to workers in states with unemployment above 8.5%.

The measure differs significantly from the version passed in the House last month. That one grants 13 weeks of extended benefits only workers in high unemployment states.

All this wrangling over details comes as 400,000 people ran out of benefits in September and another 208,000 are set to lose them this month.

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Filed under: Andrew Torgan • Economy • Finance • stocks • Wall St.
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