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Thomas J. Sargent and Christopher A Sims: The art of distinguishing between cause and effect in the macroeconomy


  • Committee, Nobel Prize

    (Nobel Prize Committee)


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, Thomas J. Sargent and Christopher A. Sims, have developed methods for answering these and many other questions regarding the causal relationship between economic policy and different macroeconomic variables such as GDP, inflation, employment and investments.

Suggested Citation

  • Committee, Nobel Prize, 2011. "Thomas J. Sargent and Christopher A Sims: The art of distinguishing between cause and effect in the macroeconomy," Nobel Prize in Economics documents 2011-1, Nobel Prize Committee.
  • Handle: RePEc:ris:nobelp:2011_001

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    References listed on IDEAS

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    More about this item


    Causation; macroeconomics;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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