| Born | July 19, 1943 Pasadena, California |
|---|---|
| Nationality | American |
| Institution | New York University |
| Field | Macroeconomics, monetary economics |
| Alma mater | Harvard University PhD |
| Influences | Robert Lucas, Jr. |
| Awards |
NAS Award for Scientific Reviewing (2011) Nobel Memorial Prize in Economic Sciences (2011) |
| Information at IDEAS/RePEc | |
Thomas John "Tom" Sargent (born July 19, 1943) is an American economist, specializing in the fields of macroeconomics, monetary economics and time series econometrics. He was awarded the Nobel Memorial Prize in Economic Sciences in 2011 together with Christopher A. Sims "for their empirical research on cause and effect in the macroeconomy".[1]
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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 the Berkley Professor of Economics and Business 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.[2] 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.
Sargent is one of the leaders of the "rational expectations revolution", which argued that policy-makers cannot systematically manipulate the economy through predictable policy changes. The premise of this argument is that actors in the economy will expect future government policy changes. Sargent made important contributions to the theory with his application of new mathematical techniques to econometric models designed to account for such expectations.[3]
Sargent said that policymakers can’t manipulate the economy by “tricking” people with policy surprises. Central banks can’t permanently lower unemployment by easing monetary policy, because people will rationally anticipate higher future inflation and will strategically insist on higher wages for their labor and higher interest rates for their capital.[3]
However, the standard simple rational expectations asset pricing theories fail to fit key features of the U.S. data. Modern macroeconomics has examined free market inefficiencies to explain these discrepancies, and developed more complicated models.[3]
Europe’s generous unemployment compensation system and strong job protections have contributed to sustained high unemployment, but other workforce factors, such as labor market frictions, are equally responsible.[3]
Sargent criticized the Obama administration’s Public-Private Investment Program for jump-starting private sector purchases of toxic assets, which, he said, represented a large transfer of taxpayer funds to owners of toxic assets.[3]
Working with Neil Wallace, Sargent developed the saddle path stability characterization of the rational expectations equilibrium. As of 2011, he ranks seventeenth among the most cited economists in the world.[4]
In 2011 Sargent was awarded the NAS Award for Scientific Reviewing from the National Academy of Sciences[5] and, in September, he became the recipient of the 2011 CME Group-MSRI Prize in Innovative Quantitative Applications.[6]
Sargent is one of the leaders of the "rational expectations revolution", which argued that policy-makers cannot systematically manipulate the economy through predictable policy changes. The premise of this argument is that actors in the economy will expect future government policy changes. Sargent made important contributions to the theory with his application of new mathematical techniques to econometric models designed to account for such expectations.[3]
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".[7]
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