[ti:Two American Professors Win Nobel for Studies on Effects of Economic Policy] [ar:Mario Ritter] [al:Economics Report] [by:www.51voa.com] [00:00.00]This is the VOA Special English Economics Report. [00:05.03]Two American professors will share [00:08.87]the twenty eleven Nobel Prize in economics. [00:13.01]Staffan Normark, Permanent Secretary [00:17.15]of the Royal Swedish Academy of Sciences, [00:20.20]announced the winners this week. [00:23.29]STAFFAN NORMARK: "The Royal Swedish Academy of Sciences [00:25.43]has decided to award the Sveriges Riksbank Prize [00:30.35]in Economic Sciences in memory of Alfred Nobel, 2011, [00:35.03]to Professor Thomas J. Sargent [00:38.77]at New York University, New York, USA [00:42.02]and Professor Christopher A. Sims [00:45.46]at Princeton University, Princeton, USA." [00:49.24]Professors Sims and Sargent [00:52.47]are both sixty-eight years old. [00:54.42]They are being honored for work they did [00:58.00]in the nineteen seventies and eighties. [01:00.35]But their research has been and remains important [01:05.93]to economic policy in many countries. [01:09.77]This is especially true in a time when debt in Europe [01:15.04]and other problems around the world [01:17.55]have hurt economic growth. [01:19.99]The Nobel committee recognized the two professors [01:23.94]for their work in showing how policy decisions [01:27.63]can affect the health of economies. [01:30.59]Both men have studied how actions, [01:34.42]like raising interest rates or cutting taxes, [01:38.25]affect things like economic growth and inflation. [01:43.03]Professor Sargent studied periods of high inflation [01:48.21]in several European countries in the nineteen hundreds. [01:52.69]His work suggested that it was important [01:56.13]for governments and central banks [01:58.72]to keep inflation low and interest rates stable. [02:03.59]Professor Sims suggested a new way [02:07.04]of studying economic information over time. [02:10.43]He has used a tool of economic analysis, [02:14.61]called a vector auto-regression model. [02:18.06]Such models provide ways to examine issues [02:22.38]like whether growth in the money supply [02:25.23]helps to predict inflation. [02:27.72]Christopher Sims told reporters by telephone [02:32.10]why his work and the work of Thomas Sargent [02:35.83]is so important today. [02:38.47]CHRISTOPHER SIMS: "I think the methods [02:41.14]that I have used and Tom has developed [02:43.18]are central to finding our way out of this mess. [02:47.27]I think they point to a way to try to unravel [02:51.35]why our serious problems develop [02:54.04]and new research using these methods [03:00.17]may help us lead us out of it." [03:02.21]Professors Sargent and Sims will share prize money [03:06.50]worth about one point five million dollars. [03:09.53]The prize is officially known as the Bank of Sweden Prize [03:15.56]in Economic Sciences in Memory of Alfred Nobel. [03:20.31]It was first given in nineteen sixty-nine [03:24.10]and is the only Nobel Prize not established by Alfred Nobel. [03:30.05]And that's the VOA Special English Economics Report. [03:35.52]Mary Motta and Mil Arcega contributed to this report. [03:41.24]Find more business news along with transcripts [03:45.73]and MP3s at 51voa.com. [03:50.71]And follow us on Facebook and Twitter [03:54.49]at VOA Learning English. [03:57.59]I'm Mario Ritter.