US academics Christopher Sims and Thomas Sargent have won the 2011 Nobel Prize for economics. The Royal Swedish Academy of Sciences mentioned “their empirical research on cause and effect in the macroeconomy". They had examined how economic policy like increasing cutting taxes or interest rates, influences macroeconomic variables like inflation and GDP.
The official name of award is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It wasn’t a component of the original set of awards created in Alfred Nobel's (Swedish chemist) 1895 will, but was formed by Sweden's central bank, the Riksbank, in year 1968.
The 5 main prizes are in chemistry, physics, literature, peace and medicine. Thomas Sargent, 68, is a professor of economics at New York University. The academy pointed to his work groping the post-World War II epoch, when most nations primarily tended to employ a high-inflation policy, but ultimately introduced logical changes in economic policy and reverted to a lesser inflation rate.
Christopher Sims, also 68, is a professor of economics and banking at Princeton University. The academy whispered he had developed a technique based on "vecto autoregression" to scrutinize how the economy is exaggerated by provisional alterations in economic policy and other things - for example, the consequences of a boost in the interest rate set by a central bank.
Prof Sims whispered: "I believe that the techniques that I have employed and that Tom has developed are necessary to finding our way out of this mess.”, Dale Mortensen Christopher Pissarides and Peter Diamond won the 2010 prize for their work on how policy and regulation affects wages and jobs.
