Following are excerpts released by the prize committee in awarding Thomas J. Sargent and Christopher A. Sims the 2011 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel:

“Thomas J. Sargent and Christopher A. Sims developed the methods that now predominate in empirical studies of the two-way relations between money or monetary policy and the broader macroeconomy.

“Sargent is the father of modern structural macroeconometrics … (he) has pioneered the empirical study of … how active expectations can be incorporated into empirical models … (and) expectations formation itself, by considering many alternatives, including learning. Sargent has made substantive contributions to the study of monetary policy in his analyses of historical inflation episodes throughout the world.

“Sims is the father of vector autoregressions (VARs) as an empirical tool in macroeconomics. This has become an indispensable tool … for studying macroeconomic aggregates: for interpreting time series, for forecasting, and for policy analysis. … VAR analysis has provided a prolific means of identifying macroeconomic shocks to variables like technology and monetary policy, and of examining the causal effects of such shocks.

“In their entirety, the research contributions of Sargent and Sims are not merely always and everywhere central in empirical macroeconomic research — it would be nearly impossible to imagine the field without them.

“Thomas J. Sargent and Christopher A. Sims are awarded the 2011 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel

for their empirical research on cause and effect in the macroeconomy.”