The 2011 Nobel prize in economic sciences was awarded today to two GSAS alums who both received their Harvard PhDs in 1968, Thomas J. Sargent, the Berkley Professor of Economics and Business New York University, and Christopher A. Sims (also a Harvard College graduate, Class of 1963), the Harold H. Helm ’20 Professor of Economics and Banking at Princeton.

The pair was recognized for their empirical work on cause and effect in the macroeconomy, research that has helped guide policy around the world as nations measure the effectiveness of various actions intended to bolster struggling economies.

From the Royal Swedish Academy of Sciences: "How are GDP and inflation affected by a temporary increase in the interest rate or a tax cut? What happens if a central bank makes a permanent change in its inflation target or a government modifies its objective for budgetary balance? This year's Laureates in economic sciences have developed methods for answering these and many of other questions regarding the causal relationship between economic policy and different macroeconomic variables such as GDP, inflation, employment and investments."

Although Sargent and Sims carried out their work independently, the Academy continued, their "seminal work during the 1970s and 1980s has been adopted by both researchers and policymakers throughout the world. Today, the methods developed by Sargent and Sims are essential tools in macroeconomic analysis."

Read the New York Times account.

Read about the GSAS alumni who won the 2011 Nobel Prize in physics.