The 2011 Nobel Prize in Economic Sciences was awarded today to Thomas J. Sargent of New York University and Christopher A. Sims of Princeton University for their empirical research on cause and effect in the macroeconomy. Tyler Cowen, the general director of the Mercatus Center and an economics professor at George Mason University, specifically praises Sargent’s contribution to monetary policy research and Sims’s contribution at his blog Marginal Revolution.

“Sargent really is one of the smartest, deepest, and most scholarly of all contemporary economists,” says Cowen. “He has influenced the thought of all good macroeconomists and the economic history is dedicated and path breaking. If I had to come up with a criticism, I find that some of his papers have an excess of rigor and don’t leave the reader with a clear intuitive result.”

Cowen cites Sargent’s research with Neil Wallace in 1981, “Some Unpleasant Monetarist Arithmetic,” as his most valuable contribution.

“The main idea of this paper is that good monetary policy requires good fiscal policy. Otherwise, the fight against inflation will not be credible,” says Cowen.

Christopher A. Sims, writes Cowen, is one of the most important figures in macro econometrics in the last thirty years, if not the most important.

“Think of Sims as an economist who found the traditional Keynesian methods ‘just not good enough’ and who worked hard to improve them,” says Cowen. “He brought a lot more rigor into empirical macro and he helped define a school of thought at the University of Minnesota.”

"I think of Sims’ work as more defined by a method than by any set of conclusions," writes Cowen, and cites his three major contributions as: vector autoregression as a macroeconomic method, impulse response functions, and deep examinations of money-income causality.