Thomas J. Sargent

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Thomas J. Sargent
Nobel Prize 2011-Press Conference KVA-DSC 7770.jpg
Born (1943-07-19) July 19, 1943 (age 70)
Pasadena, California
Nationality American
Institution Hoover Institution, Stanford University
New York University
Field Macroeconomics, monetary economics
Alma mater UC Berkeley, (B.A.)
Harvard University, (PhD)
Influences Robert Lucas, Jr.
John Muth
Awards

NAS Award for Scientific Reviewing (2011)

Nobel Memorial Prize in Economic Sciences (2011)
Information at IDEAS/RePEc
Interview with Thomas J. Sargent after his Nobel lecture

Thomas John "Tom" Sargent (born July 19, 1943) is an American economist, specializing in the fields of macroeconomics, monetary economics and time series econometrics. As of 2014, he ranks fourteenth among the most cited economists in the world.[1] He was awarded the Nobel Prize in Economics in 2011 together with Christopher A. Sims "for their empirical research on cause and effect in the macroeconomy".[2]

Education[edit]

Sargent earned his B.A. from the University of California, Berkeley in 1964, being the University Medalist as Most Distinguished Scholar in Class of 1964, and his Ph.D. from Harvard in 1968. He held teaching positions at the University of Pennsylvania (1970–1971), University of Minnesota (1971–1987), University of Chicago (1991–1998), Stanford University (1998–2002) and Princeton University (2009), and is currently a Professor of Economics at New York University (since 2002). He is a Fellow of the Econometric Society since 1976. In 1983, Sargent was elected to the National Academy of Sciences and also the American Academy of Arts and Sciences.[3] He has been a senior fellow of the Hoover Institution at Stanford University since 1987, and a member of the Advisory Board of the Penn Institute for Economic Research at the University of Pennsylvania.

Professional contributions[edit]

Sargent is one of the leaders of the "rational expectations revolution", which argues that the people being modeled by economists can predict the future, or the probability of future outcomes, at least as well as the economist can with his model. Rational expectations was introduced into economics by John F. Muth,[4] then Robert Lucas, Jr., and Edward C. Prescott took it much farther.

Sargent's main contributions to rational expectations were to:

In 1975 he and Neil Wallace proposed the Policy-ineffectiveness proposition, which refuted a basic assumption of Keynesian economics.

Sargent went on to refine or extend rational expectations reasoning by:

Sargent has also been a pioneer in introducing recursive economics to academic study, especially for macroeconomic issues such as unemployment, fiscal and monetary policy, and growth. His series of textbooks co-authored with Lars Ljungqvist are seminal in the contemporary graduate economics curriculum.

Sargent has pursued a research program with Lars Ljungqvist[20] designed to understand determinants of differences in unemployment outcomes in Europe and the United States during the last 30 years. The key questions this program addresses are: 1) Why during the 1950s and 1960s was unemployment systematically lower in Europe than in the United States? 2) Why for two and a half decades after 1980 has unemployment been systematically higher in Europe than in the United States? In "Two Questions about European Unemployment", the answer is given that "Europe has stronger employment protection despite also having had more generous government supplied unemployment compensation". While this institutional differences remained the same over this time period, the microeconomic environment for workers changed, with a higher risk of human capital depreciation in the 1980s.[21]

In 2011 Sargent was awarded the NAS Award for Scientific Reviewing from the National Academy of Sciences[22] and, in September, he became the recipient of the 2011 CME Group-MSRI Prize in Innovative Quantitative Applications.[23]

Sargent is known as a devoted teacher. Among his PhD advisees are men and women at the forefront of macroeconomic research. Sargent's reading group at Stanford and NYU is a famous institution among graduate students in economics.[24][25]

Nobel Memorial Prize and lecture[edit]

On October 10, 2011, Sargent together with Chris Sims was awarded the Nobel Memorial Prize in Economic Sciences. The award cited their "empirical research on cause and effect in the macroeconomy".[26] His Nobel lecture, titled "United States Then, Europe Now" was delivered on December 11, 2011.[27]

Popular Culture[edit]

He is featured playing himself in a television commercial for Ally Bank in which he is asked if he can predict CD rates two years from now to which he simply answers: "No." [28]

Selected publications[edit]

  • Sargent, Thomas J. (1971). "A Note on the Accelerationist Controversy". Journal of Money, Credit and Banking (Blackwell Publishing) 3 (3): 721–25. doi:10.2307/1991369. JSTOR 1991369. 
  • Sargent, Thomas J., and Neil Wallace (1973). "The Stability of Models of Money and Growth with Perfect Foresight". Econometrica (The Econometric Society) 41 (6): 1043–48. doi:10.2307/1914034. JSTOR 1914034. 
  • Sargent, Thomas & Wallace, Neil (1975). "'Rational' Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule". Journal of Political Economy 83 (2): 241–254. doi:10.1086/260321. 
  • Sargent, Thomas & Wallace, Neil (1976). "Rational Expectations and the Theory of Economic Policy". Journal of Monetary Economics 2 (2): 169–183. 
  • Sargent, Thomas J. (1979, 1987). Macroeconomic Theory. New York: Academic Press. ISBN 0-12-619750-4. 
  • Sargent, Thomas J. and Lars P. Hansen (1980). "Formulating and Estimating Dynamic Linear Rational Expectations Models". Journal of Economic Dynamics and Control 2 (1): 7–46. doi:10.1016/0165-1889(80)90049-4. 
  • Sargent, Thomas J. and Neil Wallace (1981). "Some Unpleasant Monetarist Arithmetic". Federal Reserve Bank of Minneapolis Quarterly Review 5 (3): 1–17. 
  • Sargent, Thomas J. (1983). “The Ends of Four Big Inflations” in: Inflation: Causes and Effects, ed. by Robert E. Hall, University of Chicago Press, for the NBER, 1983, p. 41–97.
  • Sargent, Thomas J. (1987). Dynamic Macroeconomic Theory. Harvard University Press. ISBN 0-674-21877-9. 
  • Sargent, Thomas J. and Albert Marcet (1989). "Convergence of Least Squares Learning Mechanisms in Self-Referential Linear Stochastic Models". Journal of Economic Theory 48 (2): 337–368. doi:10.1016/0022-0531(89)90032-X. 
  • Sargent, Thomas J. and Albert Marcet (1989). "Convergence of Least Squares Learning in Environments with Hidden State Variables and Private Information". Journal of Political Economy 97 (6): 251. doi:10.1086/261603. 
  • Sargent, Thomas J. and Lars Ljungqvist (2000, 2004). Recursive Macroeconomic Theory. MIT Press. ISBN 0-262-12274-X. 
  • Sargent, Thomas J. and Lars Hansen (2001). "Robust Control and Model Uncertainty". American Economic Review 91 (2): 60–66. doi:10.1257/aer.91.2.60. 

References[edit]

  1. ^ "Economist Rankings at IDEAS". Ideas.repec.org. Retrieved 2011-10-10. 
  2. ^ Nobel Prize Press Release
  3. ^ "Book of Members, 1780–2011: Chapter S". American Academy of Arts and Sciences. Retrieved 13 October 2011. 
  4. ^ Muth, J. F. (1961). "Rational Expectations and the Theory of Price Movements". Econometrica 29 (3): 315–335. doi:10.2307/1909635.  edit
  5. ^ Sargent, Thomas J., and Neil Wallace, 1975. "'Rational' Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule," Journal of Political Economy, 83(2), pp. 241-254.
  6. ^ Sargent, T. J. (1981). "Interpreting Economic Time Series". The Journal of Political Economy 89 (2): 213–248. doi:10.1086/260963. JSTOR 1833309.  edit
  7. ^ Sargent, Thomas J.; Wallace, Neil (1976). "Rational Expectations and the Theory of Economic Policy". Journal of Monetary Economics 2 (2): 169–183. 
  8. ^ Sargent, T. J. (1979). "A note on maximum likelihood estimation of the rational expectations model of the term structure". Journal of Monetary Economics 5: 133–135. doi:10.1016/0304-3932(79)90029-1.  edit
  9. ^ Sargent, T. J. (1977). "The Demand for Money during Hyperinflations under Rational Expectations: I". International Economic Review 18 (1): 59–82. doi:10.2307/2525769.  edit
  10. ^ Sargent, T. J.; Fand, D.; Goldfeld, S. (1973). "Rational Expectations, the Real Rate of Interest, and the Natural Rate of Unemployment". Brookings Papers on Economic Activity 1973 (2): 429–480. doi:10.2307/2534097.  edit
  11. ^ Sargent, Thomas J., and Neil Wallace (1981). "Some Unpleasant Monetarist Arithmetic". Federal Reserve Bank of Minneapolis Quarterly Review 5 (3): 1–17. 
  12. ^ Sargent, Thomas J. (1983). “The Ends of Four Big Inflations” in: Inflation: Causes and Effects, ed. by Robert E. Hall, University of Chicago Press, for the NBER, 1983, p. 41–97.
  13. ^ Sargent, T. J.; Velde, F. O. R. (1995). "Macroeconomic Features of the French Revolution". The Journal of Political Economy 103 (3): 474–518. doi:10.1086/261992.  edit
  14. ^ Sargent, Thomas J. (1992). Rational Expectations and Inflation. Harper and Row. ISBN 0-06-500280-6. 
  15. ^ Sargent, Thomas J.; Velde, F.R. (2003). The Big Problem of Small Change. Princeton University Press. ISBN 978-0-691-11635-8. 
  16. ^ Sargent, Thomas J. (1993). Bounded Rationality in Macroeconomics. Oxford University Press. ISBN 978-0-19-828869-5.  Description and chapter-preview 1st-page links.
  17. ^ Marcet, A. (1989). "Convergence of least squares learning mechanisms in self-referential linear stochastic models*1". Journal of Economic Theory 48 (2): 337–201. doi:10.1016/0022-0531(89)90032-X.  edit
  18. ^ a b Sargent, Thomas J. (1999). The Conquest of American Inflation. Princeton University Press. ISBN 0-691-00414-5. 
  19. ^ Hansen, Lars Peter; Sargent, Thomas J. (2008). Robustness. Princeton University Press. ISBN 0-691-11442-0. 
  20. ^ "Lars Ljungqvist". 
  21. ^ Ljungqvist, L.; Sargent, T. J. (2008). "Two Questions about European Unemployment". Econometrica 76: 1. doi:10.1111/j.0012-9682.2008.00816.x.  edit
  22. ^ "NAS Award for Scientific Reviewing". National Academy of Sciences. Retrieved 27 February 2011. 
  23. ^ "2011 CME Group-MSRI Prize". 
  24. ^ "Conference in Honor of Tom Sargent's Nobel Prize in Economics and Reading Group Reunion". 
  25. ^ "Videos of Reading Group Conference". 
  26. ^ "The Prize in Economic Sciences 2011". Nobelprize.org. 2008-12-10. Retrieved 2011-10-10. 
  27. ^ http://www.nobelprize.org/nobel_prizes/economics/laureates/2011/sargent-lecture.html
       • Sargent, Thomas J. (2011). "United States Then, Europe Now," Nobel lecture.
  28. ^ AdWeek: Economist Thomas J. Sargent appears in ad for Ally Bank

External links[edit]