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A history and future of frontier research

The Minneapolis Fed’s research partnership has shaped policy for decades. Our 2019 conference highlighted its 50th anniversary and launched its next stage

January 3, 2020

The four horsemen during their panel
Photo courtesy of the Regents of the University of Minnesota
A history and future of frontier research

Sound economic research is the bedrock of solid economic and public policy. That research is best inspired by confronting key policy issues and vital societal challenges.

At the Minneapolis Fed, we have a long history of conducting research that drives policy change. Whether it be bank regulation, international trade, monetary policy, technological innovation, educational disparities, wage gaps, or carbon pricing, our researchers have produced frontier research, and still do. Much of this work is the result of a unique partnership with the economics department at the University of Minnesota.

The Bank and the university hosted a conference in August 2019 to commemorate our accomplishments and to analyze lessons for the future. “Research and Policy: A Golden Minnesota Partnership” was a first-of-its-kind three-day event and a confirmation of the groundbreaking research our scholars have produced. Five Nobel laureates, with ties to both the Bank and the U, convened for the occasion, along with scores of other scholars from around the world. They gathered not simply to honor the past, but to present new research to inform—and fuel—the future.

Nobel laureate Christopher Sims epitomizes the Minneapolis Fed-University of Minnesota partnership. He conducted research at the Bank while teaching at the U. He also boldly challenged some of the assumptions of the Bank’s hallmark “rational expectations” theory.

A highlight of the gathering was the reunion of Edward Prescott, Thomas Sargent, Christopher Sims, and Neil Wallace—the “Four Horsemen of the Economic Revolution.” Their informative, entertaining retrospective at the university’s Ted Mann Concert Hall attracted more than 700 people, a unique public embrace for economic theorists.

University of Chicago economist Nancy L. Stokey talks about the Minneapolis Fed’s attraction to world-class visiting scholars like her. It’s about the Bank’s scholarly rigor and collegial atmosphere.

You can see the complete “Four Horsemen” event here.

In a commentary about the conference and ongoing scholarship, former Bank Research Director Art Rolnick and current Research Director Mark Wright wrote that this gathering was “not a mere celebration of bygone research. Our glory days have not passed.” It was, in brief, not an exercise in self-congratulation but a foundation for the future.

At the Minneapolis Fed and the university, the link between sound research and urgent challenges endures.