Christopher A. Sims
Sims in 2011
Christopher Albert Sims
October 21, 1942
|Institution|| Princeton University |
University of Minnesota
|Field|| Macroeconomics |
|Alma mater||Harvard University, (A.B, PhD)|
|Hendrik S. Houthakker|
| Lars Peter Hansen |
|Contributions||Use of vector autoregression|
|Awards||Nobel Memorial Prize in Economic Sciences (2011)|
|Information at IDEAS / RePEc|
Christopher Albert "Chris" Sims (born October 21, 1942) is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd ’52 University Professor of Economics at Princeton University.Together with Thomas Sargent, he won the Nobel Memorial Prize in Economic Sciences in 2011. The award cited their "empirical research on cause and effect in the macroeconomy".
Princeton University is a private Ivy League research university in Princeton, New Jersey. Founded in 1746 in Elizabeth as the College of New Jersey, Princeton is the fourth-oldest institution of higher education in the United States and one of the nine colonial colleges chartered before the American Revolution. The institution moved to Newark in 1747, then to the current site nine years later, and renamed itself Princeton University in 1896.
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, is an award for outstanding contributions to the field of economics, and generally regarded as the most prestigious award for that field. The award's official name is The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Sims was born in Washington, D.C., the son of Ruth Bodman (Leiserson), a Democratic politician and daughter of William Morris Leiserson, and Albert Sims, a state department worker.His father was of English and Northern Irish descent, and his mother was of half Estonian Jewish and half English ancestry. His uncle was Yale economist Mark Leiserson. Sims earned his A.B. in mathematics from Harvard University magna cum laude in 1963 and his PhD in Economics from Harvard in 1968 under supervision of Hendrik S. Houthakker. He was also a graduate student at the University of California, Berkeley from 1963–64. He has held teaching positions at Harvard, Yale University and, since 1999, Princeton. He spent the longest portion of his career at the University of Minnesota, teaching there from 1970 to 1990. Sims is a Fellow of the Econometric Society (since 1974), a member of the American Academy of Arts and Sciences (since 1988) and a member of the National Academy of Sciences (since 1989). In 1995 he was president of the Econometric Society; in 2012, he was president of the American Economic Association. Sims currently lives in New Jersey.
William Morris Leiserson (1883–1957) was a notable labor relations scholar and mediator.
Yale University is a private research university in New Haven, Connecticut. Founded in 1701, it is the third-oldest institution of higher education in the United States and one of the nine Colonial Colleges chartered before the American Revolution. It is a member of the Ivy League.
Harvard University is a private Ivy League research university in Cambridge, Massachusetts, with about 6,700 undergraduate students and about 15,250 post graduate students. Established in 1636 and named for its first benefactor, clergyman John Harvard, Harvard is the United States' oldest institution of higher learning, and its history, influence, and wealth have made it one of the world's most prestigious universities.
Sims has published numerous important papers in his areas of research: econometrics and macroeconomic theory and policy. Among other things, he was one of the main promoters of the use of vector autoregression in empirical macroeconomics. He has also advocated Bayesian statistics, arguing for its power in formulating and evaluating economic policies.
Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships". The first known use of the term "econometrics" was by Polish economist Paweł Ciompa in 1910. Jan Tinbergen is considered by many to be one of the founding fathers of econometrics. Ragnar Frisch is credited with coining the term in the sense in which it is used today.
Vector autoregression (VAR) is a stochastic process model used to capture the linear interdependencies among multiple time series. VAR models generalize the univariate autoregressive model by allowing for more than one evolving variable. All variables in a VAR enter the model in the same way: each variable has an equation explaining its evolution based on its own lagged values, the lagged values of the other model variables, and an error term. VAR modeling does not require as much knowledge about the forces influencing a variable as do structural models with simultaneous equations: The only prior knowledge required is a list of variables which can be hypothesized to affect each other intertemporally.
Bayesian statistics is a theory in the field of statistics based on the Bayesian interpretation of probability where probability expresses a degree of belief in an event, which can change as new information is gathered, rather than a fixed value based upon frequency or propensity. The degree of belief may be based on prior knowledge about the event, such as the results of previous experiments, or on personal beliefs about the event. This differs from a number of other interpretations of probability, such as the frequentist interpretation that views probability as the limit of the relative frequency of an event after a large number of trials.
Sims has been an outspoken opponent of the rational expectations revolution in macroeconomics, arguing that it should be thought of as a "cautionary footnote" to econometric policy analysis, rather than "a deep objection to its foundations."He has been similarly skeptical of the value of real business cycle models.
In economics, "rational expectations" are model-consistent expectations, in that agents inside the model are assumed to "know the model" and on average take the model's predictions as valid. Rational expectations ensure internal consistency in models involving uncertainty. To obtain consistency within a model, the predictions of future values of economically relevant variables from the model are assumed to be the same as that of the decision-makers in the model, given their information set, the nature of the random processes involved, and model structure. The rational expectations assumption is used especially in many contemporary macroeconomic models.
He also helped develop the fiscal theory of the price level and the theory of rational inattention.
The fiscal theory of the price level is the idea that government fiscal policy affects the price level: for the price level to be stable, government finances must be sustainable: they must run a balanced budget over the course of the business cycle, meaning they must not run a structural deficit.
In economics, the theory of rational inattention deals with the effects of the cost of information acquisition on decision making. For example, when the information required for a decision is costly to acquire, the decision makers may rationally take decisions based on incomplete information, rather than incurring the cost to get the complete information.
On October 10, 2011, Christopher A. Sims together with Thomas J. Sargent was awarded the Nobel Memorial Prize in Economic Sciences. The award cited their "empirical research on cause and effect in the macroeconomy".His Nobel lecture, titled "Statistical Modeling of Monetary Policy and its Effects" was delivered on December 8, 2011.
Thomas John "Tom" Sargent is an American economist, who is currently the W.R. Berkley Professor of Economics and Business at New York University. He specializes in the fields of macroeconomics, monetary economics and time series econometrics. As of 2014, he ranks fourteenth among the most cited economists in the world. He was awarded the Nobel Memorial Prize in Economics in 2011 together with Christopher A. Sims for their "empirical research on cause and effect in the macroeconomy".
Translating his work into everyday language, Sims said it provided a technique to assess the direction of causality in central bank monetary policy. It confirmed the theories of monetarists like Milton Friedman that shifts in the money supply affect inflation. However, it also showed that causality went both ways. Variables like interest rates and inflation also led to changes in the money supply.
Robert Emerson Lucas Jr. is an American economist at the University of Chicago, where he is currently the John Dewey Distinguished Service Professor Emeritus in Economics and the College. Widely regarded as the central figure in the development of the new classical approach to macroeconomics, he received the Nobel Prize in Economics in 1995 "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy". He has been characterized by N. Gregory Mankiw as "the most influential macroeconomist of the last quarter of the 20th century."
Jan Tinbergen was an important Dutch economist. He was awarded the first Nobel Memorial Prize in Economic Sciences in 1969, which he shared with Ragnar Frisch for having developed and applied dynamic models for the analysis of economic processes. He is widely considered to be one of the most influential economists of the 20th century and one of the founding fathers of econometrics. It has been argued that the development of the first macroeconometric models, the solution of the identification problem, and the understanding of dynamic models are his three most important legacies to econometrics. Tinbergen was a founding trustee of Economists for Peace and Security. In 1945, he founded the Bureau for Economic Policy Analysis (CPB) and was the agency's first director.
Econometrica is a peer-reviewed academic journal of economics, publishing articles in many areas of economics, especially econometrics. It is published by Wiley-Blackwell on behalf of the Econometric Society. The current editor-in-chief is Joel Sobel.
A macroeconomic model is an analytical tool designed to describe the operation of the economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
Finn Erling Kydland is a Norwegian economist known for his contributions to business cycle theory. He is the Henley Professor of Economics at the University of California, Santa Barbara. He also holds the Richard P. Simmons Distinguished Professorship at the Tepper School of Business of Carnegie Mellon University, where he earned his Ph.D., and a part-time position at the Norwegian School of Economics (NHH). Kydland was a co-recipient of the 2004 Nobel Memorial Prize in Economics, with Edward C. Prescott, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles."
Econometric models are statistical models used in econometrics. An econometric model specifies the statistical relationship that is believed to hold between the various economic quantities pertaining to a particular economic phenomenon. An econometric model can be derived from a deterministic economic model by allowing for uncertainty, or from an economic model which itself is stochastic. However, it is also possible to use econometric models that are not tied to any specific economic theory.
John Brian Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University, and the George P. Shultz Senior Fellow in Economics at Stanford University's Hoover Institution.
Edmund Strother Phelps is an American economist and the recipient of the 2006 Nobel Memorial Prize in Economic Sciences.
Sir Christopher Antoniou Pissarides is a British-Cypriot economist. He is the School Professor of Economics & Political Science and Regius Professor of Economics at the London School of Economics, Professor of European Studies at the University of Cyprus and Chairman of the Council of National Economy of the Republic of Cyprus. His research focuses on topics of macroeconomics, notably labour, economic growth, and economic policy. In 2010, he was awarded the Nobel Prize in Economics, jointly with Peter A. Diamond and Dale Mortensen, "for their analysis of markets with theory of search frictions."
Lars Peter Hansen is an American economist. He is the David Rockefeller Distinguished Service Professor of economics at the University of Chicago and a 2013 recipient of the Nobel Memorial Prize in Economics.
Jean Tirole is a French professor of economics. He focuses on industrial organization, game theory, banking and finance, and economics and psychology. In 2014 he was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of market power and regulation.
The Journal of Political Economy is a bimonthly peer-reviewed academic journal published by the University of Chicago Press. It covers both theoretical and empirical economics. It was established in 1892 by James Laurence Laughlin.
Dynamic stochastic general equilibrium modeling is a method in macroeconomics that attempts to explain economic phenomena, such as economic growth and business cycles, and the effects of economic policy, through econometric models based on applied general equilibrium theory and microeconomic principles.
Michael Dean Woodford is an American macroeconomist and monetary theorist who currently teaches at Columbia University.
Nobuhiro Kiyotaki FBA is a Japanese economist and professor at Princeton University especially known for proposing several models that provide deeper microeconomic foundations for macroeconomics, some of which play a prominent role in New Keynesian macroeconomics.
Macroeconomic theory has its origins in the study of business cycles and monetary theory. In general, early theorists believed monetary factors could not affect real factors such as real output. John Maynard Keynes attacked some of these "classical" theories and produced a general theory that described the whole economy in terms of aggregates rather than individual, microeconomic parts. Attempting to explain unemployment and recessions, he noticed the tendency for people and businesses to hoard cash and avoid investment during a recession. He argued that this invalidated the assumptions of classical economists who thought that markets always clear, leaving no surplus of goods and no willing labor left idle.
Lawrence Joseph Christiano is an American economist and researcher. He is the Alfred W. Chase Chair in Business Institutions, chairman of the Department of Economics and Professor of Economics at Northwestern University. He has also taught at Carnegie Mellon University and the University of Chicago.
Following the development of Keynesian economics, applied economics began developing forecasting models based on economic data including national income and product accounting data. In contrast with typical textbook models, these large-scale macroeconometric models used large amounts of data and based forecasts on past correlations instead of theoretical relations. These models estimated the relations between different macroeconomic variables using regression analysis on time series data. These models grew to include hundreds or thousands of equations describing the evolution of hundreds or thousands of prices and quantities over time, making computers essential for their solution. While the choice of which variables to include in each equation was partly guided by economic theory, variable inclusion was mostly determined on purely empirical grounds. Large-scale macroeconometric model consists of systems of dynamic equations of the economy with the estimation of parameters using time-series data on a quarterly to yearly basis.
The Heller-Hurwicz Economics Institute was launched in 2010 in order to promote socioeconomic research.
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Peter A. Diamond
Dale T. Mortensen
Christopher A. Pissarides
| Laureate of the Nobel Memorial Prize in Economics |
Served alongside: Thomas J. Sargent
Alvin E. Roth
Lloyd S. Shapley
| President of the American Economic Association |