AKERLOF, GEORGE A.

AKERLOF, GEORGE A. (1940– ), U.S. economist, Nobel Prize laureate. Born in New Haven, Connecticut, where his father was a member of the Yale faculty, Akerlof earned his bachelor's degree from Yale University in 1962 and his doctorate from the Massachusetts Institute of Technology in 1966. Akerlof 's father, who was born in Sweden, was a chemist; his mother's family was of German-Jewish descent. His maternal grandfather established the first clinic in cardiology in the United States at Johns Hopkins, though he was later denied tenure there, according to Akerlof, because of his Jewish identity. After receiving his doctorate, Akerlof joined the Economics Department of the University of California, Berkeley, where he began work on his landmark study "The Market for 'Lemons,'" for which he would later win the Nobel Prize for economics (in 2001), though it was initially rejected for publication by academic journals. In 1967 and 1968 he was a visiting professor at the Indian Statistical Institute in New Delhi, and then returned to Berkeley. From 1978 to 1980 he was Cassel Professor of Economics with Respect to Money and Banking at the London School of Economics. He subsequently served as Koshland Professor of Economics at Berkeley. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism" was published in the Quarterly Journal of Economics in 1970. In this study of the role of asymmetric information in the market, Akerlof demonstrates how markets malfunction when buyers and sellers operate under different information, as in the example of used cars commonly called "lemons." The work had applications in other areas, such as health insurance, employment contracts, and financial markets. In Efficiency Wage Models of the Labor Market (1986), coauthored with his wife, Janet Yellen, Akerlof and Yellen propose rationales for the efficiency wage hypothesis, in which employers pay more than the market-clearing wage, contradicting neoclassical economic theory. Yellen later served as chair of the U.S. Council of Economic Advisors under President Bill Clinton. Akerlof served as senior staff economist with the Council of Economic Advisors in 1973 and 1974 and was visiting research economist for the Federal Reserve System Board of Governors from 1977 to 1978. A member of the board of editors of the Quarterly Journal of Economics in 1983 and of the American Economic Review from 1983 to 1990, he was named a senior fellow of the Brookings Institution in 1994 and served on the board of directors of the National Bureau of Economic Research in 1997. In 2001 Akerlof shared the Nobel Prize for economics with A. Michael Spence and Joseph E. Stiglitz for their contributions to analyses of markets with asymmetric information. (Dorothy Bauhoff (2nd ed.)