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Thursday, July 10, 2014

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Additional quotes from Nobel winners' colleagues and students

Additional quotes from the colleagues and students of 2011 Nobel Prize in economics winners Christopher Sims and Thomas Sargent:

Paul Krugman, a Princeton professor of economics and public affairs and a 2008 Nobel laureate, from his Conscience of a Liberal blog:

"Go Princeton! (And NYU)

"This year’s Nobel goes to Chris Sims and Tom Sargent. Many congratulations. I’d advise both of them to grab as much sleep as they can over the next few months, because it’s gonna be exhausting.

"This is a statistical techniques prize — both men worked on methods for extracting insight from the data history provides us, which generally don’t offer anything like a controlled experiment. As the detailed explanation of the prize (.pdf) explains, before Sargent and Sims came along, econometrics consisted largely of estimating models you had no good reason to believe based on identifying assumptions (if you don’t already know, you don’t want to) that lacked credibility. S and S played a key role in developing methods that let the data speak instead.

"Is this a fresh-water macro prize? Sargent is surely identified with that school, and to some extent these techniques have tended to be associated with fresh-water modeling. But they’re much more widely used than that. For example, Barry Eichengreen, who does a lot of quantitative economic history from a relatively Keynesian perspective, routinely uses Sims-type time-series techniques, e.g. in this paper on multipliers in the Great Depression.

"So, again, congrats to the new laureates."

After the Nobel Prize press conference on the Princeton campus, Krugman spoke about how the experience might effect the new Nobel laureates. "If it's anything like mine, they're totally have an out-of-body experience right now. It's wild. All these people who you had no idea had your cell phone number have clogged your voicemail totally. It's going to take a month to get through the stack of congratulations. It turns your whole world upside down. I was really, really happy for about a day, then completely snowed under until after the ceremony was over (in December). Then I enjoyed it only after that. It's a wonderful, wonderful thing."

Regarding the importance of the Nobel award for the University, Krugman added, "We already knew it was a great university. Princeton's is actually the best economics department in the world, but this is a bit of external validation of that."

* * *

Eric Maskin, a visiting lecturer with the rank of professor in Princeton's Department of Economics and a 2007 Nobel laureate, said of the newest Nobel laureates, "If they feel the way I did four years ago, they're feeling overwhelmed. This day is sensory overload. You just get hit over and over again in a very nice way, but it's incessant: phone calls, press conferences, congratulations from anyone you've ever known. It's very hard to process all at one time. You need some weeks to really start coming to terms with it."

He added, "This year’s Nobel in economics recognizes economic science with a capital S. Tom Sargent and Chris Sims are exemplary (and creative) practitioners of the idea that truth emerges in economics through rigorous theory and meticulous attention to data."

* * *

Mark Watson, Princeton's Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs and acting chair of the economics department, said of Sims and Sargent, "They've changed macroeconomics in the biggest way possible, and allowed us to credibly answer questions that we just couldn't have answered before."

Citing their work in sorting out cause and effect in macroeconomics, Watson said, "It's always difficult to sort out cause and effect when the effect feeds back on causes. Sims developed methods that allow us to look at data and tease out cause and effect, as though you were doing a controlled experiment.

"Sims is one of the nicest guys in the world, and one of the best citizens we have in the department," he added. Sims postponed the sabbatical he was set to take this year because the department needed him to teach an undergraduate course, Watson said.

"Sims has trained hordes of graduate students; he's a wonderful adviser. He brings out the best research in our students, and he cares and spends lots of time with them," Watson said.

Sargent and Sims are co-teaching a graduate course this semester on advanced macroeconomics. Sargent, who was a visiting professor at Princeton last year as well, also is teaching a graduate course on macroeconomic theory. "In addition to doing pathbreaking research, Sargent is an inspirational classroom teacher," Watson said. "Students leave his class so excited. He really turns graduate students on to macroeconomics. He's been doing that his entire career."

* * *

Nobuhiro Kiyotaki, a Princeton professor of economics, said Sargent and Sims' work "brings theoretical macroeconomics and empirical macroeconomics closer together. In this sense, their work is a fundamental contribution to modern macroeconomics. Sims' research is tremendously influential for policy analysis."

* * *

Richard Rogerson, a Princeton professor of economics and public affairs, was a graduate student at the University of Minnesota in the same period that Sims and Sargent were members of the faculty there. Sims and Sargent "were in the prime of their careers, but you could go knock on their doors and they would spend as much time as you wanted talking to you. They always had time to talk to students," Rogerson recalled. "These faculty were in a seminar room, interacting with each other and arguing about things. I was lucky just to be able to witness that."

* * *

Justin Weidner, a first-year graduate student in economics at Princeton who is in Sargent's class "Macroeconomic Theory I," said he was very excited to hear that his professor had been recognized. Weidner became familiar with Sargent's work as an undergraduate.

"He's pretty famous," Weidner said. "I was excited to know he was teaching this class. He's my favorite professor -- he explains things really clearly, he's funny and he's down to earth."

* * *

Lars Svensson, deputy director of Sweden's central bank, Sveriges Riksbank, worked in Princeton's Department of Economics with Sims from 2001 to 2009.

"At Princeton I had the great privilege of having the office next door to Chris's. We talked very much, and we taught graduate courses together. I enjoyed my interaction with Chris tremendously, and I miss it very much. I have learnt a lot about macroeconomics, monetary and fiscal policy, and expectations from Chris," Svensson said.

"This prize is extremely well deserved. Chris and Tom have developed scientific methods that are extremely useful," Svensson added. "Their methods are not only used very much in empirical and theoretical research, their methods are also used every day by central banks and finance ministries all over the world. It is difficult to conceive of modern monetary and fiscal policy without the use of the methods developed by Chris and Tom."

* * *

Eric Leeper, a professor of economics at Indiana University, studied under Sims as a graduate student at the University of Minnesota when Sims was a professor there, and has since co-written papers with him.

"He really created the path by which most empirical work in macroeconomics is now being done," Leeper said. "Central banks have formal models that they use, and those models are typically estimated using the kinds of methods Chris developed and has advocated. Because these models help to inform policy, Chris' work has had a powerful influence on policymaking around the world."

Working on his Ph.D. with Sims had a strong effect on his career, Leeper said.

"Chris has always been extraordinarily open-minded about research -- he's not an ideologue about methodology. As a student of his, that open-mindedness had a strong influence on me, and sticks with me to this day. It comes in part from the realization that we don't have all the answers and we need to be fairly agnostic about how we approach research."

He recalls that he and his fellow graduate students felt intimidated by studying with Sims, but that feeling dissolved when Sims held a cookout for them at his house in Minneapolis in the mid-1980s. The distance between student and professor vanished when a tornado warning went off, and everyone crowded into Sims' basement, where they discussed Sims' interest in photography and other non-economics topics.

* * *

Frank Schorfheide, a professor of economics at the University of Pennsylvania, said, "Sims was my dissertation adviser at Yale. He had a large number of students, and we all benefitted from his advising and conversations. He was very generous with his time. You could meet with him on a regular basis. His research really revolutionized the field. The methods that he developed 30 years ago are still widely used today to inform policy decisions."

"He was a great source of advice, always 10 steps ahead of you. As a student you had to learn to catch up, which is a good challenge. Sometimes we didn't quite understand him the first time around, but eventually — three or four weeks later — we understood. My research is very much based on his work and trying to carry it in different directions. I'm very much indebted to him for all the ideas and suggestions that he provided."

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