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Thomas John Sargent (born July 19, 1943) is an American
economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...
and the W.R. Berkley Professor of
Economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...
and Business at
New York University New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then- Secretary of the Treasury Albert Gallatin. In 1832, th ...
. He specializes in the fields of macroeconomics,
monetary economics Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and ...
, and
time series In mathematics, a time series is a series of data points indexed (or listed or graphed) in time order. Most commonly, a time series is a sequence taken at successive equally spaced points in time. Thus it is a sequence of discrete-time data. Ex ...
econometrics Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. M. Hashem Pesaran (1987). "Econometrics," '' The New Palgrave: A Dictionary of Economics'', v. 2, p. 8 p. 8 ...
. As of 2020, he ranks as the 29th most cited economist 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".


Education

Sargent graduated from
Monrovia High School Monrovia High School is a public high school located in Monrovia, California, a northeastern suburb of Los Angeles, United States. Monrovia High School is the only grades 9–12 comprehensive high school in the Monrovia Unified School Distric ...
. He earned his B.A. from the
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California) is a public land-grant research university in Berkeley, California. Established in 1868 as the University of California, it is the state's first land-grant u ...
in 1964, being the University Medalist as Most Distinguished Scholar in Class of 1964, and his PhD from Harvard in 1968, under supervision of
John R. Meyer John Robert Meyer (December 6, 1927 – October 20, 2009) was an American economist and educator. Meyer is credited with creating the field of transport economics and was one of the pioneers of cliometrics. Career Born in Pasco, Meyer atte ...
. Sargent's classmates at Harvard included Christopher A. Sims. After serving in the U.S. Army as a first lieutenant and captain, he moved on to teaching.URL:https://www.stern.nyu.edu/faculty/bio/thomas-sargent He held teaching positions at the
University of Pennsylvania The University of Pennsylvania (also known as Penn or UPenn) is a private research university in Philadelphia. It is the fourth-oldest institution of higher education in the United States and is ranked among the highest-regarded universitie ...
(1970–71),
University of Minnesota The University of Minnesota, formally the University of Minnesota, Twin Cities, (UMN Twin Cities, the U of M, or Minnesota) is a public land-grant research university in the Twin Cities of Minneapolis and Saint Paul, Minnesota, United States. ...
(1971–87),
University of Chicago The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private university, private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park, Chicago, Hyde Park neighborhood. The University of Chic ...
(1991–98), Stanford University (1998–2002) and
Princeton University Princeton University is a private 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 ...
(2009), and is currently a professor of economics at
New York University New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then- Secretary of the Treasury Albert Gallatin. In 1832, th ...
(since 2002). He previously held the position of President of the American Economic Association and the
Econometric Society The Econometric Society is an international society of academic economists interested in applying statistical tools to their field. It is an independent organization with no connections to societies of professional mathematicians or statisticians. ...
where he has been a fellow since 1976. In 1983, Sargent was elected to the National Academy of Sciences and also the
American Academy of Arts and Sciences The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, a ...
. He has been a senior fellow of the
Hoover Institution The Hoover Institution (officially The Hoover Institution on War, Revolution, and Peace; abbreviated as Hoover) is an American public policy think tank and research institution that promotes personal and economic liberty, free enterprise, an ...
at Stanford University since 1987.


Professional contributions

Sargent is one of the leaders of the "
rational expectations 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 i ...
revolution," which argues that the people being modeled by economists can predict the future, or the probability of future outcomes, at least as well as the economist can with his model. Rational expectations was introduced into economics by
John Muth John Fraser Muth (; September 27, 1930 – October 23, 2005) was an American economist. He is "the father of the rational expectations revolution in economics", primarily due to his article "Rational Expectations and the Theory of Price Movemen ...
, then
Robert Lucas, Jr. Robert Emerson Lucas Jr. (born September 15, 1937) 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 ...
, and Edward C. Prescott took it much farther. By some works written in close collaboration with Lucas and
Neil Wallace Neil Wallace (born 1939) is an American economist and professor of economics at Penn State University. He is considered one of the main proponents of new classical macroeconomics in the field of economics. Education Wallace earned his BA in e ...
, Thomas J. Sargent could fundamentally contribute to the evolution of
new classical macroeconomics New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous founda ...
. Sargent's main contributions to rational expectations were these: * trace the implications of rational expectations, with Wallace, for alternative monetary-policy instruments and rules on output stability and price determinacy. * help make the theory of rational expectations statistically operational. * provide some early examples of rational expectations models of the
Phillips curve The Phillips curve is an economic model, named after William Phillips hypothesizing a correlation between reduction in unemployment and increased rates of wage rises within an economy. While Phillips himself did not state a linked relationship ...
, the
term structure of interest rates In finance, the yield curve is a graph which depicts how the yields on debt instruments - such as bonds - vary as a function of their years remaining to maturity. Typically, the graph's horizontal or x-axis is a time line of months or ye ...
, and the
demand for money In monetary economics, the demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits rather than investments. It can refer to the demand for money narrowly defined as M1 (directly spendable ...
during
hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
s. * analyze, along with Wallace, the dimensions along which
monetary Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are ...
and
fiscal policy In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variab ...
must be coordinated intertemporally. * conduct several historical studies that put rational expectations reasoning to work to explain consequences of dramatic changes in macroeconomic policy regimes.Sargent, Thomas J. (1983). "The Ends of Four Big Inflations" in: ''Inflation: Causes and Effects'', ed. by Robert E. Hall, University of Chicago Press, for the NBER, 1983, p. 41–97. In 1975 he and Wallace proposed the
policy-ineffectiveness proposition The policy-ineffectiveness proposition (PIP) is a new classical theory proposed in 1975 by Thomas J. Sargent and Neil Wallace based upon the theory of rational expectations, which posits that monetary policy cannot systematically manage the level ...
, which challenged a basic assumption of Keynesian economics. Sargent went on to refine or extend rational expectations reasoning by further: * studying the conditions under which systems with bounded rationality of agents and adaptive learners converge to rational expectations. * using the notion of a self-confirming equilibrium, a weaker notion of rational expectations suggested by limits of learning models. * studying contexts with
Lars Peter Hansen Lars Peter Hansen (born 26 October 1952 in Urbana, Illinois) is an American economist. He is the David Rockefeller Distinguished Service Professor in Economics, Statistics, and the Booth School of Business, at the University of Chicago and a ...
in which decision makers do not trust their probability model. In particular, Hansen and Sargent adapt and extend methods from robust control theory. Sargent has also been a pioneer in introducing
recursive economics Recursive economics is a branch of modern economics based on a paradigm of individuals making a series of two-period optimization decisions over time. Differences between recursive and neoclassical paradigms The neoclassical model assumes a one-per ...
to academic study, especially for macroeconomic issues such as unemployment, fiscal and monetary policy, and growth. His series of textbooks, co-authored with Lars Ljungqvist, are seminal in the contemporary graduate economics curriculum. Sargent has pursued a research program with Ljungqvist designed to understand determinants of differences in unemployment outcomes in Europe and the United States during the last 30 years. The two key questions the program addresses are why, in the 1950s and 1960s, unemployment was systematically lower in Europe than in the United States and why, for two and a half decades after 1980, unemployment has been systematically higher in Europe than in the United States. In "Two Questions about European Unemployment," the answer is that "Europe has stronger employment protection despite also having had more generous government supplied unemployment compensation"." While the institutional differences remained the same over this time period, the microeconomic environment for workers changed, with a higher risk of human capital depreciation in the 1980s. In 1997, he won the Nemmers Prize in Economics In 2011, he was awarded the
NAS Award for Scientific Reviewing The NAS Award for Scientific Reviewing is awarded by the U.S. National Academy of Sciences "to recognize authors whose reviews have synthesized extensive and difficult material, rendering a significant service to science and influencing the cours ...
from the National Academy of Sciences and, in September, he became the recipient of the 2011 CME Group- MSRI Prize in Innovative Quantitative Applications. Sargent is known as a devoted teacher. Among his PhD advisees are men and women at the forefront of macroeconomic research . Sargent's reading group at Stanford and NYU is a famous institution among graduate students in economics. In 2016, Sargent helped found the non-profi
QuantEcon
project, which is dedicated to the development and documentation of modern open source computational tools for economics, econometrics, and decision making. Currently he is director of the Sargent Institute of Quantitative Economics and Finance (SIQEF) at Peking University HSBC Business School in Shenzhen.


Nobel Prize

On October 10, 2011, Sargent, with Christopher A. Sims, was awarded the
Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
. The award cited their "empirical research on cause and effect in the macroeconomy". His Nobel lecture, "United States Then, Europe Now," was delivered on December 11, 2011.


In popular culture

He is featured playing himself in a television commercial for
Ally Financial Ally Financial is a bank holding company organized in Delaware and headquartered in Detroit, Michigan. The company provides financial services including car finance, online banking via a direct bank, corporate lending, vehicle insurance, mor ...
in which he is asked if he can predict CD rates two years from now, to which he simply answers, "No." Sargent is notable for making short speeches. For example, in 2007 his Berkeley graduation speech consumed 335 words.Text of Berkeley Speech


Selected publications

* * * * * * * * Sargent, Thomas J. (1983). "The Ends of Four Big Inflations" in: ''Inflation: Causes and Effects'', ed. by Robert E. Hall, University of Chicago Press, for the NBER, 1983, pp. 41–97. * * * * *


References


External links

*
Thomas J. Sargent – NYU Stern

Sargent personal website


* {{DEFAULTSORT:Sargent, Thomas J. 1943 births American Nobel laureates Fellows of the American Academy of Arts and Sciences Fellows of the Econometric Society Harvard University alumni Living people Macroeconomists Time series econometricians Members of the United States National Academy of Sciences New York University Stern School of Business faculty Nobel laureates in Economics Presidents of the Econometric Society Princeton University staff Stanford University Department of Economics faculty University of California, Berkeley alumni University of Chicago faculty University of Minnesota faculty University of Pennsylvania faculty Hoover Institution people 20th-century American writers 21st-century American non-fiction writers 20th-century American economists 21st-century American economists Articles containing video clips Presidents of the American Economic Association Distinguished Fellows of the American Economic Association National Bureau of Economic Research Economists from California Corresponding Fellows of the British Academy Monrovia High School alumni