in supply typically caused by changes and improvements in technology accounted for "Not only long term increases in living standards but also to many of the short term fluctuations in business cycles." To study this hypothesis Prescott established a model to study the change in output, investment, consumption, labor productivity, and employment, between the end of the Second World War and 1980. Using this model the two economists were able to correlate 70% of the fluctuation in output to changes and growth in technology. Their main contribution, however, was the way of modeling macroeconomic variables with microfoundations. Political activity In January 2009 Prescott, along with more than 250 other economists and professors, signed an open letter to U.S. President Barack Obama opposing the passage of the American Recovery and Reinvestment Act. The letter was sponsored by libertarian think tank, the Cato Institute, and was printed as a paid advertisement in several newspapers including The New York Times and the Arizona Republic. His late writings focused on the negative effect of taxes on the economy in Europe. Honours and awards United States National Academy of Sciences (2008) Nobel Memorial Prize in Economic Sciences (2004) Erwin Plein Nemmers Prize in Economics, Northwestern University (2002) Fellow, American Academy of Arts and Sciences (1992) Fellow, Econometric Society (1980) Alexander Henderson Award, Carnegie Mellon (1967) References Further reading Kehoe, T. J., and E. C. Prescott, editors, Great Depressions of the Twentieth Century, Federal Reserve Bank of Minneapolis, 2007. Rules Rather than Discretion: The Inconsistency of Optimal Plans by Finn Kydland|Kydland and E. C. Prescott Time to Build and Aggregate Fluctuations, by Finn Kydland and E. C. Prescott Prescott, Edward C. 'More Time on the Job', in The 4% Solution: Unleashing the Economic Growth America Needs, edited by Brendan Miniter. New York: Crown Business. 2012. External links Federal Reserve Bank of Minneapolis contains the Nobel Prize Lecture 8 dec 2004 The Transformation of Macroeconomic Policy and Research 1940 births 2022 deaths Economists from New York (state) American Nobel laureates Arizona State University faculty Case Western Reserve University alumni Tepper School of Business alumni Carnegie Mellon University faculty Federal Reserve economists Macroeconomists New classical economists Nobel laureates in Economics Swarthmore College alumni University of Minnesota faculty University of Pennsylvania faculty People from Glens Falls, New York Members of the United States National Academy of Sciences Fellows of the American Academy of Arts and Sciences Fellows of the