"Christopher A. Sims (1980) argued that to estimate the impact of a policy change such changes need to have occurred in the past. With sufficient data and compelling identification restrictions of policy changes, estimating the impact of a policy change uniquely with aggregate data is entirely feasible. That line of thinking led to a large and still evolving literature on vector autoregressions and their use in policy evaluations, and sometimes evoked heated debates on whether regressions are useful and what it means to change policy (Uhlig, 2022)"
"His more famous macroeconomic contributions came after with “Money, Income and Causality” (1972) which attracted a lot of interest because it came out in the peak of the monetarists-Keynesian controversy."
"Sims is also known as one of the originators of the fiscal theory of the price level which argues that government fiscal policy, including debt and taxes present and future, is the primary determinant of the price level or inflation as opposed to monetary policy."
Sims was awarded the Nobel prize in Economic Sciences in 2011 together with Thomas Sargeant “for their empirical research on cause and effect in the macroeconomy”.
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