NEW YORK ( TheStreet) -- The Nobel economics prize was awarded to two Americans -- Thomas Sargent of New York University and Christopher Sims of Princeton -- for their research on the cause and effect relationship in the macroeconomy. The research of Sargent and Sims, said the Royal Swedish Academy of Sciences in a press statement, developed methods for answering questions such as how are gross domestic product and inflation affected by a temporary increase in the interest rate or a tax cut, or what happens if a central bank makes a permanent change in its inflation target. "Today, the methods developed by Sargent and Sims are essential tools in macroeconomic analysis," the academy said. The two professors carried out their work independently in the 1970s and 1980s. Sargent and Sims will split the prize of 10 million kronor ($1.5 million). -- Written by Joseph Woelfel >To contact the writer of this article, click here: Joseph Woelfel >To submit a news tip, send an email to: email@example.com.