UC San Diego Colleagues Win Nobel
WASHINGTON — Two longtime UC San Diego colleagues won the Nobel Prize in Economics on Wednesday for, among other things, explaining the embarrassing fact that it's as easy to show a link between economic growth and sunspots as it is growth and interest rates.
Clive W. J. Granger, 69, and Robert F. Engle, 61, shared the Nobel for providing a set of statistical tools to distinguish between "stupid and non-stupid" relationships among economic statistics and for better estimating how far off a forecast may be, said Harvard economist James H. Stock.
Before their work, forecasters generally assumed that statistics like those for the gross domestic product bore an orderly relationship to such things as interest rates, money supply and consumption.
But their work convinced forecasters that many economic measures are much more random than previously thought and that "the vast majority of econometric research was, therefore, trash," said David Ingram, an international economist with the forecasting firm Economy.com.
"These are extraordinarily productive thinkers," said University of Rochester economist Charles I. Plosser, who co-wrote a 1982 paper that is credited with moving many of the issues the two men tackled to academic center stage.
"They developed techniques that have allowed economists to be much more sophisticated in investigating and interpreting economic data," Plosser said.
Granger, a native of Wales, was in New Zealand when the Royal Swedish Academy announced his selection. He told university officials who reached him there, "I was awakened
Granger was described by fellow UC San Diego economist Halbert White as "old school," an avid tennis player and a San Diego Chargers football fan.
Engle, who left San Diego for New York University in 2000, said in a phone interview from a house he owns in France that he was "totally overwhelmed by the honor and very pleased to share it with Clive Granger."
He said he learned of the award after returning from lunch. He said he sat down with his wife and had a cup of coffee. White described Engle as an accomplished figure skater and competitive ice dancer, as well as a hiker and painter.
The UCSD economics department, where the men spent the bulk of their academic careers, is known as a powerhouse in econometrics, the use of statistics and mathematical methods to study economic phenomena.
