Oliver Hart, Bengt Holmstrom Win 2016 Nobel Prize in Economics

Economists Oliver Hart and Bengt Holmstrom were awarded the Nobel Prize in Economics on Monday for their contributions to the understanding of contracts and how they apply to such arrangements as performance-based pay for top executives. Mats Persson, Professor of Economics at the Institute for International Economic Studies, Stockholm University, believes their studies can also guide some of the governments’ economic decisions. "These two laureates, Hart and Holmstrom, they have given theoretical foundations for analyzing which activity should be run by private capitalists and which activity should be run by the government," said Persson. "In a country with small population like Sweden, private ownerships, private firms have proved very good for Sweden for the last 100 or 200 years. And I think the same applies to China regardless of the size of the country. Private ownership to land, private ownership to companies is a good way to economic success. Of course some activities have to be performed by the government; you cannot privatize everything," he added. Asked about the ongoing economic reforms and innovations in China, Persson also gave his advice. "Innovation activities are much more vigorous in privately owned firms than when controlled by the government. So a country that wants innovation in the economy should leave a lot of spaces for private entrepreneurs," said Persson. The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, is an award for outstanding contributions to the field of economics, and generally regarded as the most prestigious award for that field. Laureates in the Memorial Prize in Economics are selected by the Royal Swedish Academy of Sciences. More on:http://www.cctvplus.com/news/20161011/8034108.shtml#!language=1 Subscribe us on Youtube: https://www.youtube.com/c/CCTVPlus CCTV+ official website: http://www.cctvplus.com/ LinkedIn: https://www.linkedin.com/company/cctv-news-content Facebook: https://www.facebook.com/NewsContent.CCTVPLUS Twitter: https://twitter.com/CCTV_Plus