Gaps in the data become a problem here once again. "When an economy goes into recession and that growth has started to decline, we usually don’t know for sure that this has happened until around six months after it’s actually happened." Sims explains that this is because there are gaps in the data, and shows that fiscal policy, even if it’s applied quickly, tends to come a little late. "That’s why we have recessions, because if we knew when they were coming, we could take an action to avoid them."
In the aftermath of the 2008 financial crisis, the U.S. pursued a policy of quantitative easing, where the central bank (the Federal Reserve) injected more cash into the economy. In the days since the crash, Sims’s work has become more important, showing how causality goes both ways. And how interest rates, inflation, and other variables lead to changes in the money supply. Sims and Thomas Sargent were honored with the Nobel Prize in Economics in 2011 for their work. But even with the most prestigious approval of his methods and ideas, "Chris feels very uncomfortable answering questions he is not expert in," Brunnermeier says. Maybe that’s the reason he often turns down speaking engagements, preferring to spend time with his family.