- 2011 Nobel Prize in Economics
Intro
American economist, who is currently the W.R. Berkley Professor of Economics and Business at New York University. He was awarded the Nobel Prize in Economics in 2011 together with Christopher Sims "for their empirical research on cause and effect in the macroeconomy".
Education and Work Experience
1968, Ph.D., Harvard University
1987-Present, Senior fellow at the Hoover Institution
2002-Present, William Berkley Professor of Economics, New York University
Honors and Awards
1983, Member of the United States National Academy of Sciences
1983, Fellow of American Academy of Arts and Sciences
2011, Nobel Prize in Economics
Major Academic Achievements
Prof. Sargent is one of the leaders of the “rational expectations revolution”. His main contributions to rational expectations were these: trace the implications of rational expectations, with Wallace, for alternative monetary-policy instruments and rules on output stability and price determinacy; help make the theory of rational expectations statistically operational; provide some early examples of rational expectations models of the Phillips curve, the term structure of interest rates, and the demand for money during hyperinflations; analyze, along with Wallace, the dimensions along which monetary and fiscal policy must be coordinated intertemporally; conduct several historical studies
that put rational expectations reasoning to work to explain consequences of dramatic changes in macroeconomic policy regimes.
Sargent went on to refine or extend rational expectations reasoning by further: studying the conditions under which systems with bounded rationality of agents and adaptive learners converge to rational expectations; using the notion of a self-confirming equilibrium, a weaker notion of rational expectations suggested by limits of learning models. In particular, Hansen and Sargent adapt and extend methods from robust control theory. Sargent has also been a pioneer in introducing recursive economics to academic study, especially for macroeconomic issues such as unemployment, fiscal and monetary policy, and growth.