Prescott, Edward C.

Prescott, Edward C.

(born Dec. 26, 1940, Glens Falls, N.Y., U.S.) U.S. economist. Prescott studied at Swarthmore College (B.A., 1962), Case Western Reserve University (M.S., 1963), and Carnegie Mellon University (Ph.D., 1967), where he later taught and advised Finn E. Kydland on his doctorate. Working with Kydland, he demonstrated how a declared commitment to a low inflation rate by policy makers might create expectations of low inflation and unemployment rates. The two men also established the microeconomic foundation for business cycle analyses, demonstrating that technology changes or supply shocks, such as oil price hikes, could be reflected in investment and relative price movements and thereby create short-term fluctuations around the long-term economic growth path. In 2004 Prescott shared the Nobel Prize for Economics with Kydland.