The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Prescott, Edward Christian (Born 1940)

  • Stephen L. Parente
Reference work entry


\Edward Prescott was awarded the Nobel Prize in Economics in 2004 with Finn Kydland for their contributions to dynamic macroeconomics. Prescott is a member of a small group of economists who, starting in the 1970s, revolutionized macroeconomics by challenging the Keynesian consensus. While he is best known for his research on business cycles and the optimal design of economic policy, he has made important contributions to other applied fields, such as finance and development, as well as to economic theory. He has also made important contributions to methodology, having pioneered many of the standard contemporary techniques and tools in macroeconomics.


American Academy of Arts and Sciences American Economic Association Bayesian analysis Business cycle Clubs Consumer surplus Debreu, G Discretion vs rules Dynamic programming Econometric Society Economic development Endogenous growth models Equity premium Financial economics Firms Friedman, M Gibrat’s law Haavelmo, T Hodrick–Prescott filter Imperfect information Industrial organization International inequality Investment equation Klein, L Lotteries Lucas, R Microeconomic foundations Misperceptions theory Model calibration vs. statistical estimation Modigliani, F Moral hazard Muth, J Neoclassical growth model New Classical Economics Organizational capital Partial equilibrium Prescott, E Productivity shocks Rational expectations theory Real business cycle theory Recursive competitive equilibrium Recursive methods Relative incomes vs relative growth rates Rules vs discretion Statistical estimation vs. model calibration Stochastic process Time inconsistency Total factor productivity 

JEL Classifications

B31 B4 C6 C11 D8 E2 E3 E61 G1 L2 O4 
This is a preview of subscription content, log in to check access.


  1. Debreu, G. 1954. Valuation equilibrium and Pareto Optimum. Proceedings of the National Academy of Sciences 40: 588–592.CrossRefGoogle Scholar
  2. Lucas, R. 1972. Expectations and the neutrality of money. Journal of Economic Theory 4: 103–124.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Stephen L. Parente
    • 1
  1. 1.