Edward Prescott, Nobel laureate in economics died. He was 81 years old
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US economist Edward Prescott, Nobel laureate in economics for his analysis of how business cycles are directed by factors such as political and technological change, died at the age of 81 in a nursing home in Paradise Valley, Arizona.
The family announced to the Washington Post that Prescott had undergone treatment for cancer. Born in Glen Falls (New York) on December 26, 1940, after studying mathematics and operations research and a PhD in economics from Carnegie Mellon University in Pittsburgh (1967), Prescott taught at the universities of Pennsylvania and Minnesota, and in the Carnegie Mellon herself. Since 2003 he was a professor at Arizona State University.
In 2004 he received the Nobel Prize in Economics, together with Finn E. Kydland, “for his contributions to dynamic macroeconomics: the temporal coherence of economic policy and the driving forces of the economic cycle”. The studies by Prescott and Kydland have been fundamental not only for macroeconomic analysis but also for the formulation of fiscal and monetary policies in many countries. Their theory of the temporal consistency of economic policy serves in practice to analyze how long a certain fiscal or monetary measure is applicable.
Their studies have been foundations for important research programs on the credibility and feasibility of economic policy and have broadly influenced the reforms implemented by national banks and the monetary policies of many countries over the past 30 years. With the essay “Rules rather than discretion: the inconsistency of optimal planning”, published in the “Journal of Political Economy” in 1977, with Kydland, Prescott paved the way for the interpretation of economic policy as a strategic game between private operators and policy makers .
In “Time to build and aggregate fluctuations”, which appeared in “Econometrica” in 1982, (again with Kydland) he first advanced the hypothesis that at the origin of the economic cycle there are real shocks, affecting technology. Prescott expressed positions opposed to public intervention in the economy and in 2009 signed, with 250 other American economists, a manifesto against the fiscal stimuli launched by United States President Barack Obama to mitigate the effects of the economic crisis.
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