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St. Olaf students get private lecture from Nobel-winning economist

By David Gonnerman '90
December 10, 2004

St. Olaf students in Assistant Professor of Economics Terry Fitzgerald's senior seminar on economic growth recently had the opportunity to meet Edward Prescott, co-winner of the 2004 Nobel Memorial Prize in Economic Sciences, at the Federal Reserve Bank of Minneapolis. Prescott, a professor at Arizona State University-Tempe and a researcher at the Federal Reserve Bank of Minneapolis, presented a preview of his Nobel acceptance lecture, which he delivered the following week during a ceremony in Stockholm, Sweden.

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Prescott's recent works have been a study topic in Fitzgerald's course. His students have performed policy experiments from Prescott's papers and worked with his Endogenous Growth Theory. Prescott's lecture addressed such questions as "Why do Americans work so much more than Europeans?" and "What explains the economic slowdown in Japan during the 1990s?"

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"Not only did Professor Fitzgerald arrange for us to hear and meet one of the most important and influential people in economics, but he also gave us the tools to understand his contributions to the field," says Elizabeth Ball '05.
"The experience was made all the more exciting by the fact that we had read much of his work," says student Mark Skeba '05. "I felt like a true scholar because I was able to follow and understand his work."

Fitzgerald, a colleague of Prescott's at the Federal Reserve Bank, arranged the visit to give Prescott the opportunity to speak before a practice audience and also for his students to hear the man Fitzgerald calls "arguably the most influential macroeconomist of the past 30 years." Additionally, Prescott, who was Fitzgerald's doctoral advisor at the University of Minnesota, is currently working with him on an undergraduate education project to bring modern economic analysis into the classroom through computer simulation, policy exercises and lecture notes.

"It was incredible just to have the opportunity to see a Nobel Prize winner like Prescott in such a small forum," says David Sluis '05. "I'm proud that St. Olaf has faculty like Professor Fitzgerald who are able to arrange for once-in-a-lifetime opportunities like this."

Prescott is splitting this year's prize -- worth nearly $1.5 million -- with Norwegian Finn Kydland for their joint contributions to dynamic macroeconomics. The Nobel Memorial Prize in Economic Sciences was established in 1968 by the Central Bank of Sweden as a memorial to Swedish industrialist Alfred Nobel, who in 1896 established the Nobel Prizes in chemistry, literature and physics, plus the Nobel Peace Prize, through his will.

Additional reporting by Meredith Utt '08.

Contact David Gonnerman at 507-786-3315 or gonnermd@stolaf.edu.