Edward C. Prescott
Interview with the 2004 Laureates in Economics, Finn E. Kydland and Edward C. Prescott, December 11, 2004. Interviewers are Professor Karl-Gustaf Löfgren and Johanna Åström, post graduate student, Umeå University.
The Laureates talk about why they became economists, how they started their research (5:49), their discovery and its results (9:40), development of the business cycle theory (13:51), Norwegian Laureates (17:16), women in the economic field (21:19) and their present work (23:15).
Participating in the 2004 edition of Nobel Minds: the Nobel Laureates in Physics, David J. Gross and Frank Wilczek, the Nobel Laureates in Chemistry, Aaron Ciechanover, Avram Hershko and Irwin Rose, the Nobel Laureates in Physiology or Medicine, Richard Axel and Linda B. Buck and the Laureates in Economic Sciences, Finn E. Kydland and Edward C. Prescott. Program host is Nik Gowing.
Telephone interview with Professor Edward C. Prescott after the announcement of the 2004 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, October 11, 2004. Interviewer is Marika Griehsel, freelance journalist.
– Hello Mr. Prescott. My name is Marika Griehsel. Congratulations. I’m calling from Stockholm. How are you?
– Excited. I’ve just been calling people.
– We have woken you up very early. Have you been able to receive the news that you have received the Economic Prize in Memory of Alfred Nobel?
– Yes. The Committee called.
– The Committee called.
– This morning.
– What was your thoughts?
– It’s a one-in-a-lifetime event. It’s exciting. It was such an honor that Finn Kydland and I were awarded this great prize. We – I’m just so excited.
– We have understood that you have just got the news. Have you and Kydland worked for a long time together? Do you have any associations?
– Oh yes! We worked in the early 1970’s. I went to Carnegie-Mellon where – as an untenured faculty member – and he was a graduate – advanced graduate student there. I guess I ended up being his advisor. In 1974–75, he had arranged for me to visit Bergen, at The Norwegian School of Business and Economics, and that’s where we wrote our “Time and Consistency” paper, which is one of the – well, the award is for that paper, I was told. Along with the “Foundations of Business” articles. He was hired by Carnegie-Mellon in the late 70s, and we worked together at that time. And at the end of that time is when we wrote our second paper – we actually wrote it about 1980 on the – I think it was – that laid the foundations of “Business Cycle” theory, which is the other part of the award.
– To you, what is the biggest challenges – the economical challenges – that we are facing in the world today?
– I look at the world as a whole. Things are going quite well. The rich countries are growing nicely – not spectacularly – but the great thing is that the less developed countries are catching up, and are becoming rich. The world is becoming economically integrated. And this has … You said, “what’s the biggest challenge,” I guess is – keep the momentum going. Sustain these – I tend to think of them as cooperative international relationships, where countries enter into – or people in various countries enter into voluntary trades with people in other countries, where the technology is transferred between countries, where there’s a lot of insourcing as well as outsourcing. A lot of trade – I think that fosters economic efficiency.
– How do you tend to spend the rest of the day? What will you be – what will you do?
– Well, I think I’ll – pretty soon I’m going to drive down to the office and get – try to get a bit better prepared to answer questions – such as the ones you’re asking. As I’m sure the – there will be contacts from the press. The – I’ve – so far I’ve just been making calls to my wife who happens to be in San Francisco, and one son who’s in Miami Beach, another son that’s in Richmond, to let them know.
– We congratulate you here from Stockholm, and I hope we will see you here together with your colleague. Will you be here on the tenth of December?
– You couldn’t keep me away – couldn’t keep my wife away either.
– Congratulations and all the best.
– Thank you very much for your call.
– Thank you.
– Bye bye.
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