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Prescott, Kydland Win Nobel Prize Summary

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Issue:

Business

 

Written by:

Nathanael V

 

Date added:

January 4, 2013

 

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Grade:

A

 

No of pages / words:

2 / 320

 

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7309 times

 

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Essay content:

The results started a banking movement "to make central banks more independent and thus less prone to be influenced by elected officials." In other words banks were to put up blinders, if you will, to stay a course, and focus on goals. In 1982 John Maynard Keynes was thought to be at the fore front of economic policy especially concerning the business cycle...
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He thought economic "booms and bust" were a result of changes in demand by consumers and businesses. Around this time Prescott and Kydland began challenging the teaching of Keynes. What they found is that broad shifts were due largely by changes in productivity. Such as new technology or a surge in oil prices can cause a recession or an economic boom...
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