2011 Prize in Economic Sciences goes to cause and effect in macroeconomics

The 2011 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to Thomas Sargent and Christopher Sims “for their empirical research on cause and effect in the macroeconomy”.

The official background information for the public does a good job of explaining the achievements behind the prize, beginning as follows:

How are GDP and inflation affected by a temporary increase in the interest rate or a tax cut? What happens if a central bank makes a permanent change in its inflation target or a government modifies its objective for budgetary balance? This year’s Laureates in economic sciences, Thomas J. Sargent and Christopher A. Sims, have developed methods for answering these and many other questions regarding the causal relationship between economic policy and different macroeconomic variables such as GDP, inflation, employment and investments.

Perhaps, you’d prefer an explanation under 140 characters? Well, a summary was provided in tweet form by Tim Harford, the Undercover Economist at the Financial Times and author of Adapt.

If this has given you an appetite to learn more about the subject, I strongly recommend that you follow Tyler Cowan and Alex Tabbarok’s excellent coverage at Marginal Revolution. There you’ll find some background on the Laureates, context on the key achievements, and links to papers, presentations, videos and much more. If someone combined this approach with The Guardian’s live blog format, which posted reactions from experts in the field, you’d pretty much have my perfect one-stop-shop for Nobel coverage.

For now, though, I’ll leave the last word to someone who took a rather different slant on the news…

 

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