Thomas J. Sargent facts for kids
Quick facts for kids
Thomas J. Sargent
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Sargent in 2011
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| Born | July 19, 1943 Pasadena, California, U.S.
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| Institution | Hoover Institution Carnegie-Mellon University University of Pennsylvania University of Minnesota University of Chicago Stanford University New York University Peking University HSBC Business School |
| Field | Macroeconomics, monetary economics |
| Doctoral advisor |
John R. Meyer |
| Doctoral students |
Robert Litterman Monika Piazzesi Mariacristina De Nardi Ellen McGrattan Lars Peter Hansen Albert Marcet Noah Williams Laura Veldkamp Richard Clarida Danny Quah Sagiri Kitao Martin Eichenbaum Lawrence J. Christiano Greg Kaplan |
| Influences | John F. Muth Robert E. Lucas, Jr. Christopher A. Sims Neil Wallace |
| Awards | Nemmers Prize in Economics (1996) NAS Award for Scientific Reviewing (2011) Nobel Memorial Prize in Economic Sciences (2011) |
| Information at IDEAS / RePEc | |
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Thomas J. Sargent
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| Allegiance |  United States |
| Service/ |
 United States Army |
| Years of service | 1968-1969 |
| Rank |  Captain |
Thomas John Sargent (born July 19, 1943) is a famous American economist. He is a professor of economics and business at New York University. He studies how large economies work (this is called macroeconomics). He also looks at how money and banking affect the economy (this is monetary economics).
In 2011, he won the Nobel Memorial Prize in Economics. He shared the award with Christopher A. Sims. They won for their important research on how different things cause effects in the economy.
Contents
Education and Early Career
Thomas Sargent finished high school at Monrovia High School. He then went to the University of California, Berkeley. He earned his first degree there in 1964. He was even named the most distinguished scholar in his class!
After that, he went to Harvard. He earned his PhD, which is a very high degree, in 1968. His teacher there was John R. Meyer. Interestingly, Christopher A. Sims, who later shared the Nobel Prize with him, was also a classmate at Harvard.
Before becoming a full-time teacher, Sargent served in the United States Army. He was a first lieutenant and then a captain.
Teaching and Research
After his time in the army, Thomas Sargent started teaching. He taught at many well-known universities. These include the University of Pennsylvania, University of Minnesota, University of Chicago, and Stanford University. Since 2002, he has been a professor at New York University.
He has also led important groups for economists. He was the president of the American Economic Association. He also led the Econometric Society, which is a group for economists who use math and statistics.
Since 1987, he has been a senior fellow at the Hoover Institution. This is a research center at Stanford University.
Understanding Economic Decisions
Thomas Sargent is a leader in an idea called the "rational expectations revolution." This idea suggests that people in an economy are smart. They try to predict the future, or what might happen, as well as economists can. This means people make decisions based on what they expect will happen.
This idea was first brought into economics by John Muth. Then, other economists like Robert Lucas, Jr. and Edward C. Prescott developed it further. Thomas Sargent worked closely with Lucas and Neil Wallace. Together, they helped create a new way of thinking about how economies work.
Key Ideas from Sargent's Work
Sargent's work helped us understand rational expectations better. Here are some of his main contributions:
- He showed how people's expectations affect how well different money policies work. This includes how stable prices are and how much the economy produces.
- He helped make it possible to use statistics to test the theory of rational expectations.
- He gave early examples of how rational expectations could explain things like the Phillips curve. This curve shows the link between inflation and unemployment. He also looked at how it affects interest rates and the demand for money during times of very high inflation.
- He studied how money policies (like printing money) and government spending policies must work together over time.
- He looked at history to see how big changes in government economic policies affected things. He used rational expectations to explain these changes.
In 1975, Sargent and Neil Wallace came up with the idea of "policy ineffectiveness." This idea challenged an older economic theory called Keynesian economics. It suggested that some government policies might not work if people already expect them.
Learning and Uncertainty
Sargent also explored what happens when people don't always act perfectly rationally.
- He studied how people learn and adapt over time. He looked at how their actions might eventually lead to rational expectations.
- He used the idea of a "self-confirming equilibrium." This is a weaker form of rational expectations. It happens when people's beliefs are confirmed by what actually happens.
- With Lars Peter Hansen, he studied situations where decision-makers are not sure about their economic models. They used methods from robust control theory to deal with this uncertainty.
Sargent also helped introduce "recursive economics" to universities. This is a way of studying economic problems step-by-step. He applied it to big issues like unemployment and government policies. His textbooks, written with Lars Ljungqvist, are very important for students studying economics today.
Unemployment Studies
Sargent and Ljungqvist also researched why unemployment rates were different in Europe and the United States. They looked at the last 30 years. They wanted to know why Europe had lower unemployment in the 1950s and 60s. And why, after 1980, Europe had higher unemployment than the U.S.
They found that Europe had stronger rules protecting jobs. It also had more generous unemployment benefits from the government. Even though these rules stayed the same, the world of work changed. In the 1980s, workers faced a higher risk of their skills becoming less useful.
Awards and Recognition
Thomas Sargent has received many important awards for his work.
- In 1997, he won the Nemmers Prize in Economics.
- In 2011, he received the NAS Award for Scientific Reviewing. This award is from the National Academy of Sciences.
- Also in 2011, he won the CME Group-MSRI Prize for new ideas in using math for finance.
Sargent is also known for being a very dedicated teacher. Many of his former students are now leaders in economic research. He also helped start the QuantEcon project. This project creates free computer tools for economics and decision-making.
He is currently the director of the Sargent Institute of Quantitative Economics and Finance (SIQEF). This institute is at Peking University HSBC Business School in China.
Nobel Prize
On October 10, 2011, Thomas Sargent was awarded the Nobel Memorial Prize in Economic Sciences. He shared this huge honor with Christopher A. Sims. The award recognized their important "empirical research on cause and effect in the macroeconomy." This means they studied how different things in the economy cause other things to happen.
Sargent gave his Nobel lecture on December 11, 2011. It was titled "United States Then, Europe Now."
Selected Publications
- Sargent, Thomas J. (1983). "The Ends of Four Big Inflations" in: Inflation: Causes and Effects, edited by Robert E. Hall, University of Chicago Press, for the NBER, 1983, pp. 41–97.
See also
In Spanish: Thomas J. Sargent para niños
