Sargent is the professor of economics and business at New York University, while Sims is professor of economics and banking and Princeton University.
The Nobel Committee said, “this year’s laureates have developed methods for answering … questions regarding the causal relationship between economic policy and different macro-economic variables, such as GDP, inflation, employment and investments.”
Prof. Sargent worked on structural macro-economics, which can help analysing permanent changes in economic policy. As per the Jury members Prof. Sims’ method is based on “vector autoregression, and shows how the economy is affected by temporary changes in economic policy and other factors.”
Although these two researchers have worked separately but their works complement each other and “has been adopted by researchers and policymakers around the world … (and their methods) are essential tools in macro-economic analysis,” the jury adds.
