Thomas Sargent and Christopher Sims won the Nobel economics prize on Monday “for their empirical research on cause and effect in the macroeconomy,” the Royal Swedish Academy of Sciences said.
The prize committee said the winners have developed methods for answering questions such as how economic growth and inflation are affected by a temporary increase in the interest rate or a tax cut. Sargent and Sims — both 68 — carried out their research independently in the 1970s and ’80s.
“Today, the methods developed by Sargent and Sims are essential tools in macroeconomic analysis,” the citation said.
Sargent is a professor at New York University, and Sims is a professor at Princeton University.
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These “winners” won an award for producing something that is completely false and useless! Congratulations!
“Warsh gave a simple example of the kinds of things Simms and Sargent shed light on: Suppose a government imposes a tax on corn to raise more money. Consumers might confound the government’s plan by substituting wheat for corn — and causing tax revenue to drop instead of rise.”
Welcome to the world of unintended consequences.
Why do mainstream economists have to invent fancy sounding methods like “vector autoregression” to figure that out?
”Nobel Award as a cause for modern crisis”
I read few of the latest articles of Sargent and I was so ”estonished” about the content of his work: he developed / produced a lot of theoretical models about optimal fiscal policy (what?) but discussing about private individuals (that are unique but also ”aggregated” into a consomption or investment pattern); optimal monetary policy (what?). He is clear a defender of statism and interventionism in the economy and provided fake tools for public servants to justify their intervention. This award is a shame for economic comunity and could be considered as a CAUSE for current and future crisis, promoting such stupidities that are against any elementary economics. This award is the same as ”fractional reserve” privilege: produces from nothing a ”VALUE” that is used to secure a public action (fractiona reserve is mainly used now to bail-out the banking system and public sector).
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