Oxford Economics professor Alan Sokal is credited with helping to shape the global economy.
Now the Nobel prize-winning economist is back in the spotlight for his role in the global economic crisis.
Sokal was a key figure in the Great Recession of 2008-2009 and the financial crisis of 2010-2011.
The Nobel committee announced Friday it was giving him the award for his contribution to the economic recovery.
“We owe a debt of gratitude to Mr. Sokal for his contributions to economic policy,” said committee chairman Daniel Kahneman.
The economist is the first Nobel laureate in economics to be awarded the award.
The American economist’s work, in his view, is a “gold standard” of analysis.
He called it the “goldilocks” approach to economic analysis, where a small amount of information is required to make an informed decision.
Soksal was the lead author of the seminal 2009 book, The Great Moderation, in which he wrote a chapter about the relationship between the amount of liquidity available to banks and the amount that people wanted to spend.
He argued that central banks should increase liquidity to prevent banks from taking on too much debt.
In the aftermath of the crisis, the global financial system was so weak that a bank default could have sent the global stock market crashing.
The economic downturn and the Great Moderating Effect were significant events in the history of the world, but Sokal was at the heart of them.
He helped shape the economic policies that have made a huge difference in the lives of millions of people, he said in a statement.
The award ceremony will be broadcast live on CNN.
Soki, who died Friday at the age of 84, was a member of the Nobel committee for more than 30 years.
The committee announced his nomination last year, and his Nobel nomination is the culmination of a four-year search.