Edward C. Prescott, Regents Professor in the W. P. Carey School of Business at Arizona State University, died on Nov. 6, at age 81.
Prescott was one of the most influential economists in the world. He was a Guggenheim Fellow, a fellow of the Econometric Society and a fellow of the American Academy of Arts and Sciences. In 2002, he received the Nemmers Prize in Economics, and in 2004, he was awarded a Nobel Prize.
As a professor and the W. P. Carey Chair in Economics, he was a beloved and respected member of the W. P. Carey School community for 20 years.
Prescott was born on Dec. 26, 1940, in Glens Falls, New York. He earned his bachelor’s degree from Swarthmore College in Pennsylvania, advanced to Case Western Reserve University in Ohio for his master’s degree and completed his PhD in economics at Carnegie Mellon University in 1967.
Prescott joined ASU in 2003 after previously serving on the faculties of the University of Pennsylvania, Carnegie Mellon, University of Chicago and University of Minnesota. He also held appointments as a visiting professor at Northwestern University, New York University, University of California – Santa Barbara, La Universidad Michoacana de San Nicolás de Hidalgo in Mexico, Australian National University and the Norwegian School of Economics. Since 2009, he also served as the director of the Center for the Advanced Study in Economic Efficiency at the W. P. Carey School. Beyond academia, Prescott served as a senior advisor at the Federal Reserve Bank of Minneapolis since 1981.
His research is foundational to the field — and our modern understanding — of macroeconomics. He and frequent co-author Finn Kydland were honored with the 2004 Nobel Memorial Prize in Economic Sciences “for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles.” The two are considered the architects of real business-cycle (RBC) theory, which argues that a substantial part of business-cycle fluctuations is the result of an optimal response of the economy to policy changes that affect its productivity.
The theory has had remarkable successes when confronted with empirical data. It broadly replicates the essential features of the business cycle and plays a central role in modern dynamic macroeconomics. The impact of Prescott’s work is clear from the five honorary professorships and doctorates he was awarded during his life, as well as multiple fellowships and his election to the National Academy of Sciences.
"Professor Edward Prescott's passing is a huge loss for the W. P. Carey School of Business community,” said Ohad Kadan, dean of the W. P. Carey School. “His contributions to economics research were foundational, and his work transformed macroeconomic policy. His passion for economics has made a lasting impact on the field, and his tremendous presence and incisive insights will be greatly missed."
Prescott was known for sharing his tremendous knowledge with the W. P. Carey School community.
“Whether it was a grad student honored to meet a Nobel laureate or another distinguished professor wanting to dissect a new theory, Ed was always generous with his time and brilliant mind. We will miss him greatly,” said Alejandro Manelli, chair of the Department of Economics.
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