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Black, Merton and Scholes — Their Central Contributions to Economics
Author(s) -
Duffie Darrell
Publication year - 1998
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00110
Subject(s) - citation , economics , positive economics , sociology , philosophy , actuarial science , law , political science
I will briefly summarize the central contributions to economics of Fisher Black, Robert C. Merton, and Myron S. Scholes. Of course, the contribution that first comes to mind is the Black-Scholes option pricing formula, for which Robert Merton and Myron Scholes were awarded the Alfred Nobel Memorial Prize in Economic Sciences in 1997. I have no doubt that, because of his key role in that far-reaching formula, Fischer Black would have shared in that prize but for his recent untimely death, so I will depart from the usual convention for essays that appear in this journal on these occasions, and address the contributions of all three of these exceptional economists simultaneously, rather than giving separate treatment to Fischer Black. My goal is to give an objective and concise account of their path-breaking research and what it has offered to the theory and practice of economics.