Christopher Sims, the Harold Helm ’20 Professor of Economics and Banking, was awarded the 2011 Nobel Prize in economics Oct. 10. Sims shares the prize with Thomas Sargent, an economics professor at New York University, who is a visiting professor at Princeton this year.
The two were honored for work they did using statistical models to determine whether changes in government policy actually influence the economy or are made in anticipation of ways that policymakers expect the economy to move. Their research has important implications for determining how expectations influence economic growth.
Sims, who is president-elect of the American Economic Association, said the work he and Sargent have done could help policymakers repair the broken international economy. “The methods that I’ve used and that Tom has used are central for finding our way out of this mess,” Sims told The New York Times. But, he cautioned, “If I had a simple answer, I would have been spreading it around the world.”
The announcement was made as this issue of PAW was going to press. Full coverage will appear in the Nov. 16 issue.