He is a professor in Economics and International Affairs at Princeton University in the US as well as a columnist in the New York Times.
The 55-year-old has formulated a new theory that determines the effects of free trade and globalisation, as well as the driving forces behind worldwide urbanisation, said the Selection Committee.
The award is the last of six Nobel prizes but is not an original Nobel. It began in 1968 in conjunction with the central bank’s tercentenary celebrations with the first winners announced the following year.
Last year’s honour was divided between three men from the US ”for having laid the foundations of mechanism design theory”.