But Thomas J. Sargent of New York University and Christopher A. Sims of Princeton, who were awarded the Nobel in economics on Monday, aren’t accustomed to the media spotlight. And they didn’t entirely relish it last week.
Asked by a Nobel representative how he would deal with being certified as an economic sage in a time of global economic distress, Professor Sargent was puzzled: “Well, I, sorry, I don’t know what’s involved in that. You know, we’re just bookish types that look at numbers and try to figure out what’s going on,” he said. “So I don’t know what to say to that!”
Speechifying didn’t appeal to Professor Sims, either. At a news conference at Princeton, he was asked to comment on the fiscal and financial rescue operations in the United States.
“Answers to questions like that require careful thinking and a lot of data analysis,” he replied. “The answers are not likely to be simple.” Neither he nor Professor Sargent is accustomed to talking “off the top of our heads,” he said. “You shouldn’t expect much from us.”
Journalism abhors a vacuum, however. Others assigned ideological views to the Nobel laureates.
An op-ed piece in The Wall Street Journal on Tuesday carried the headline, “A Nobel for Non-Keynesians,” placing the professors in the camp that opposes the interventionist philosophy of the influential British economist John Maynard Keynes.
It said the two had put “a sizable chink in the Keynesians’ armor.” An editorial said the pair was “ at odds with the recent Keynesian vogue, and in tune instead with the frustration with government fine-tuning that has dominated world economic policy since 2008.”
That’s a compelling narrative. But it’s not the way Professor Sims sees himself, as he told me by phone late last week. (It doesn’t seem to be Professor Sargent’s view, either, but we had only a brief e-mail exchange.)
Professor Sims doesn’t want to be pigeonholed. “I’m not ‘non-Keynesian,’ ” he said, adding that he has been an active “promoter of new Keynesian macroeconomic models,” because they “are the place in our profession where theory and data and policy decision-making are coming together.”
“It doesn’t really make much sense to stand on the sidelines and take potshots at them,” he said. “If you don’t like the way they’re working, you should try to do better.”
He and Professor Sargent have been “trying to do empirical macroeconomics using formal tools of statistics,” he said. “Those tools aren’t in themselves ideological.”
Professor Sims spoke favorably of the Obama administration’s fiscal stimulus programs, which are Keynesian in their countercyclical spending. “An expansionary fiscal policy is probably what we need right now,” he said.
But he criticized traditional Keynesian thought for inadequacy in “the temporal dimension,” meaning that it didn’t focus on the consequences of running long-term deficits. “The implications of that for future stringency are very important,” he said. “Our current policy debates just aren’t doing it.”
President Obama deserves praise for offering a “grand compromise” — including spending cuts and tax increases — to resolve the long-term deficit, Professor Sims said. He criticized the Republican Congressional leadership for ruling out tax increases, which, he said, most economists know are needed. And he generally approves of the accommodative monetary policies of the Federal Reserve, led by his fellow Princetonian, Ben. S. Bernanke, whom he described as a “new Keynesian.”
I asked whether there is a sense in which this is a “non-Keynesian” Nobel.
Yes, he said, but mainly in a historical sense that is already outdated.
It derives from musty arguments from the “warring schools” period of economics in the 1970s and ’80s. William Nordhaus of Yale and the late Paul Samuelson of M.I.T. used that phrase in 1985. They listed Professor Sargent, then at the University of Minnesota, as a leader of the “rational expectations school,” which was “anathema” to “old-style Keynesians.”
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