US academics Thomas Sargent and Christopher Sims shared the 2011 Nobel Prize in economics for work that helps governments and central banks weigh up responses to crises -though it offers no immediate answer to current global problems.
The methods that I have used and that Tom has developed are essential to finding our way out of this mess, Sims said over a satellite link to the announcement event in Stockholm.
But he warned that the measurement tools he and Sargent had independently worked out in the 1970s to assess the impact of policy changes and of shocks to the economic system provided no quick or simple solutions to the global crisis:
If I had a simple answer to that I would have been spreading it around the world, said Sims, 68, from Princeton University. It requires a lot of slow work looking at data, unfortunately.
The Royal Swedish Academy of Sciences, which made the award, said the 1.5 million dollars prize recognised their empirical research on cause and effect in the macro-economy and said their work laid the foundation for modern macroeconomic analysis.
One of the main tasks of macroeconomic research is to comprehend how both shocks and systematic policy shifts affect macroeconomic variables in the short and long run, the Academy said in a statement about the award.
Sargent's and Sims's awarded research contributions have been indispensable to this work.
Sargent's work focused on systemic policy shifts, while Sims was more interested in shocks to the economy, such as surging oil prices, or a sharp drop in household consumption.