"An Economist's Economist"

Theoretician Gerard Debreu wins the Nobel Prize

It was a thin book, just 114 pages long and studded with mathematical symbols, but it addressed one of the deepest and most nagging problems in economics Titled Theory of Value, the 1959 work made its author Gerard Debreu a revered figure among his colleagues. Last week the Royal Swedish Academy of Sciences extended Debreu's fame far beyond such professional confines. The academy announced that it was awarding the 1983 Nobel Prize in Economics to Debreu, 62, for three decades of distinguished achievement. The French-born professor of economics and mathematics at the University of California at Berkeley, a U.S. citizen since 1975, becomes the twelfth American to win the economics prize since it was first awarded in 1969.

Unlike past laureates, like George Stigler, the 1982 winner who has been critical of government regulation, Debreu is purely a theorist. "We have never before awarded the prize for contributions of such pure basic research," said Assar Lindbeck, chairman of the five-member Nobel committee. Notes Bent Hanson, chairman of the Berkeley economics department: "Gerard Debreu is an economist's economist. His work is very abstract, very fundamental. But everyone in the profession quotes him and must demonstrate that they know his work."

Debreu's 1959 classic showed that a freely competitive economy can, in theory, reach a state in which supply balances demand in every market and there are neither shortages nor surpluses of any product. Such a condition is called "general equilibrium." Economists have always known that supply could equal demand in a single market, such as the ones for cars or oranges. But, before Debreu, they could not be certain that an entire economy could, at least theoretically if not necessarily in fact, be in equilibrium.

The Berkeley economist's theoretical bent leads him to shun disputes such as those waged by liberal Keynesians and conservative monetarists. "I do not consider myself involved in economic policy in any way," he says. Nevertheless, his work does have some practical applications in the hands of other economists. According to Stanford Economist Kenneth Arrow, a 1972 Nobel winner who has worked closely with Debreu, equilibrium theory is used by private forecasters and government planners to predict such things as the impact of a tax change on various industries.

Friends say Debreu, who moved permanently to the U.S. in 1950, still retains many European habits. A formal but friendly man, he eats lunch at home every day and later has only a light supper, often after a swim in a university pool. He likes to exercise on weekends by tramping 20 miles through the wilderness of Point Reyes National Seashore north of San Francisco. Despite his mathematician's passion for precision and clarity, his literary taste runs to the richly convoluted prose of Proust. As a teacher, Debreu is known for jotting mathematical formulas in the upper left-hand corner of a blackboard at the beginning of a lecture and then gradually covering every bit of remaining space with symbols, until he ends up in the lower right-hand corner. His most striking qualities, says Stanford's Arrow, are "the quickness of his mind and the elegance of his thought."

Debreu, who will pocket $192,000 with his prize, first learned of the award in a 3:45 a.m. telephone call from a New York radio news reporter. An ensuing flurry of calls from friends, colleagues and other journalists kept Debreu and his wife Franc,oise from any thought of returning to sleep. Hours later, the former French army officer was posing for pictures and answering questions while padding about his living room in a red silk robe and navy-blue pajamas. By the following night, however, Debreu had learned his lesson. Asked whether he had managed to sleep well following his recognition, Debreu replied: "Very well. We disconnected the telephone." This file is automatically generated by a robot program, so viewer discretion is required.