Predicting the effects of political decisions
As co-author of papers written with both Finn Kydland and Bob Lucas that continue to define and shape economic research, Prescott never ceases to come up with thought-provoking, policy-relevant questions. "Whenever you delve into a problem, interesting questions pop up," says Prescott in a down-to-earth manner. "When you finally find the answers, it changes your thinking. You have better ways to address the complexities of reality. It’s amazing how useful our incredibly simple models are for drawing inferences and making predictions of what will happen if a certain policy or regime is followed."