Tepper School of Business › News & Events › Stories › 2022 › November › Remembering Edward Prescott, Nobel Prize Winning Economist

November 08, 2022

Remembering Edward Prescott, Nobel Prize Winning Economist

A message from Isabelle Bajeux-Besnainou, Dean of the Tepper School of Business, Richard P. Simmons Professor of Finance

I am saddened to share that we have lost an esteemed member of our Tepper School of Business community. Edward C. Prescott, a Carnegie Mellon University alumnus, former faculty member, and Nobel Prize laureate, passed away on Sunday, Nov. 6.

He studied mathematics at Swarthmore College, operations research at Case Western Reserve University, and economics at Carnegie Mellon University (Ph.D. 1967). In addition to teaching for nine years as a member of the Carnegie Mellon Graduate School of Industrial Administration (GSIA) faculty, Prescott taught at the University of Pennsylvania, University of Chicago, University of Minnesota, and Arizona State University. Prescott's research focused on economic depression, variations in economic performance, and causes for boosting national economic productivity.

In 2004, Prescott was awarded the Nobel Prize in Economics Science, for his “contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles,” according to NobelPrize.org.

Prescott was greatly admired by his colleagues. I’d like to share a few of their many accolades.

From Chester Spatt, the Pamela R. and Kenneth B. Dunn Professor of Finance

"His Nobel Prize-winning work with Finn Kydland transformed macroeconomics by recognizing the importance of credibility in policy and how economic agents view the policy formation process. His work with Rajnish Mehra identified one of the most fundamental puzzles in macro and financial economics — given reasonable levels of risk aversion, why is there such a large risk premium for holding equity compared to bonds?”

From Ali Shourideh, Associate Professor of Economics

"Ed was a giant in macroeconomics, especially due to the work he did here at Carnegie Mellon. Together with Robert Lucas (Nobel Prize in Economic Sciences in 1995), he used tools developed in statistics (by Morris DeGroot, another Carnegie Mellon giant) and operations to revolutionize macroeconomics and economic theory in the late 1960s and 1970s. Their mathematical approach to macro is taught in every Ph.D. program in the world, and is the basis of almost all modern macroeconomic policymaking. This is in addition to his numerous valuable contributions to finance, economic theory, and political economy.”

From Dennis Epple, the Thomas Lord University Professor of Economics

"In addition to his own research, Ed made a major impact on his doctoral students who went on to make fundamental contributions to the field. He also made an impact through his influence on his colleagues. I personally benefited from having him as a role model and from his thoughtful advice and encouragement.”

Edward Prescott was an extraordinary thinker and a titan in macroeconomics, thanks to his extensive work across macroeconomics and economic theory. His brilliant legacy will forever be felt at Carnegie Mellon University, as well as within the vast field of economics.

To read about Prescott’s life and contributions, visit NobelPrize.org, The Wall Street Journal, and The Washington Post for his full autobiography and obituary.