The Nobel Prize in economics has been awarded to Daron Acemoglu, Simon Johnson and James Robinson "for studies of how institutions are formed and affect prosperity".

The trio were commended for their groundbreaking research on how institutions and the rule of law significantly influence a nation's economic prosperity, in an announcement ceremony broadcast from Stockholm, Sweden, on Monday.

Acemoglu, from Istanbul, Turkiye, earned his PhD from the London School of Economics and Political Science and is currently a professor at the Massachusetts Institute of Technology in the United States.

Simon Johnson, from Sheffield, the United Kingdom, received his PhD from the Massachusetts Institute of Technology, where he now serves as a professor.

James Robinson, also from the UK, obtained his PhD from Yale University and is presently a professor at the University of Chicago.

"This year's laureates have pioneered new approaches, both empirical and theoretical, that have significantly advanced our understanding of global inequality," said Nobel committee member Jakob Svensson.

"Reducing the huge differences in income between countries is one of our time's greatest challenges," he added. While the prize winners did not propose "simple recipes or concrete policy proposals", their work had a "huge societal impact", he said.

During a phone interview conducted as part of the announcement ceremony on Monday, Acemoglu described their work as an examination of the "natural experiment" that colonialism created. He explained that this historical process had "divided the world into very different institutional trajectories".

The Sveriges Riksbank Prize in Economic Sciences, often referred to as the Nobel Prize in economics, was established by Sweden's central bank and first awarded in 1969. It recognizes outstanding contributions to economic research alongside the traditional Nobel Prize fields.