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The Norwegian Academy of Science and Letters awarded the Abel Prize for 2004 jointly to Sir Michael Francis Atiyah, University of Edinburgh and Isadore M. Singer, Massachusetts Institute of Technology. Atiyah and Singer received the prize for their discovery and proof of the index theorem, bringing together algebraic topology, geometry and analysis.

This is an attempt to write a simplified introduction to the flavor of the concepts that it deals with, which hopefully doesn't contain too many outright errors. The errors may be due to both oversimplification and the fact that I am only studying this subject myself, so corrections are welcome.

The Atiyah-Singer index theorem provides a link between algebraic topology, the study of 'large-scale', structural properties of manifolds, and advanced calculus on manifolds. So in order to precisely understand what the theorem states, some background in those two areas is essential. But I'll try to give some examples of the concepts that it deals with.

The index of a differential operator A is the difference dim (ker A) - dim (coker A), where dim means dimension, ker A means the kernel of A, and coker means the cokernel of A. The kernel and cokernel are somewhat analogous to their meanings in linear algebra, for an n x n square matrix A, just as differential operators and matrices have many analogous properties. In linear algebra the kernel is also sometimes known as nullspace, the space of vectors x with A x = 0. The cokernel is slightly more involved. For a matrix A, it is the orthogonal complement of its range, the space of y such that A x = y for some x. With some linear algebra you can prove that for an n x n matrix A, dim (ker A) - dim (coker A) = 0. But with differential operators it is more complex...I guess that's all I can say about that.

I don't know how the topological side could be illustrated well...The topological invariants that appear on the other side of the theorem are in some ways similar to describing the deformation invariant structure of a manifold by counting holes on it, but the topology that the index theorem deals with is vastly more general and powerful and doesn't necessarily have much to do with holes anymore.

The index theorem has been used for example in particle physics where the topology of the spacetime manifold can be used to obtain information about the Dirac operator for fermions, which is an elliptic (pseudo)differential operator, the operator class that the index theorem deals with.

There is a good book by Booss and Blecker on the subject: "Topology and Analysis: the Atiyah-Singer Index Formula and Gauge-Theoretic Physics", geared toward physical applications. Too Amazon doesn't seem to have it. "Spin geometry" by Lawson and Michelsohn is also pretty good. I am reading those two books at the moment..