Mr Blanchflower receives a CBE for services to economics and to the MPC
The Bank of England official who predicted the recession has been made a CBE in the Birthday Honours list.
David Blanchflower, who has recently retired from the Bank's rate-setting Monetary Policy Committee (MPC), said he was "very pleased" with the award.
Designer Jeff Banks has also been honoured with a CBE for services to the fashion industry.
Gail Rebuck, chairman and chief executive of publisher Random House, will receive a damehood.
About 14% of this year's awards have been given for services to industry and the economy.
Mr Blanchflower served on the MPC for three years before being replaced by David Miles on 1 June.
The 57-year-old will receive his CBE for services to economics as well as for his role on the MPC.
He is professor of economics at Dartmouth University in the US and has dual UK-US citizenship. He was the first non-UK resident to be appointed to the MPC, flying over for the committee's monthly meetings.
He called for sharp interest rate cuts early last year as he warned of an economic slump, but was ignored by the rest of the MPC amid worries about inflation. The Bank eventually started cutting rates in October.
Interest rates now stand at a record low of 0.5%.
Mr Blanchflower had repeatedly voiced his frustration at the MPC's unwillingness to act sooner, and called the MPC job "extremely hard work and extremely stressful".
"Being in a minority of one for a very long time was a difficult position to be in.
"I don't know about vindicated but it is a nice return for all the work I have done and all the commuting," he said. "I am very pleased."
He added that he was going back to being an academic and teaching.
Businesswoman of the Year Gail Rebuck will become a dame
The top businesswoman honoured this year is Gail Rebuck, head of the Random House Group, who will become a dame.
Earlier this year she won the Veuve Clicquot Businesswoman of the Year award.
Random House publishes about 1,500 new book titles every year.
Ms Rebuck, who is married to Tony Blair's former polling guru Lord Gould, was appointed a CBE in the 2000 Honours List.
Names from the fashion industry have also been honoured.
Jeff Banks, whose career in fashion and home furnishings design has spanned more than 40 years, is to become a CBE, while Frances Corner, head of the London College of Fashion, will be made an OBE.
Other OBEs go to Andrew Wolstenholme, BAA's project director for Heathrow Terminal 5, and Terrence Grote, the former managing director of The Independent newspaper.
Guy Ryder, general secretary of the International Trade Union Confederation, will become a CBE.
Garry Hawkes, the former chairman of the educational foundation Edge, will receive a knighthood for services to business and to vocational training.