Christopher A. Sims and Thomas J. Sargent have been awarded the Nobel Prize in Economics. Both economists received their Ph.Ds from Harvard in 1968.

Sims, a professor at Princeton U., and Sargent, a professor at New York U., received the award for their work modeling the impact of central bank and government policies on macro-economic growth.

Although Sims and Sargent researched independently, the announcement says that both of their contributions are essential to the study of macroeconomics.

The announcement highlights the difficulty of their research, which focuses on untangling the two-way relationship between fiscal policy and the economy.

“The Laureates’ methods can be applied to identify these causal relationships and explain the role of expectations,” the award citation says.

Harvard Professor of Political Economy Alberto F. Alesina said the committee made an excellent choice.

“It’s a great prize, very well deserved,” he said. “Both Sargent and Sims made an enormous contribution to our understanding of macro [economics] … and fiscal policy.”

At a press conference, Sims expressed his gratitude for receiving the prize along with Sargent.

“I have been telling people I wouldn’t be getting the prize, but I couldn’t be happier getting it with my colleague,” Sims said.

The Royal Swedish Academy of Sciences, which awards the prize, said the knowledge gained from Sims’ and Sargent’s work would help policymakers more accurately predict the influence their policies could have on outcomes such as falling productivity and rising inflation.

“They addressed the ‘central and classical’ questions in economics,” the announcement says.

The award—like the other Nobel prizes considered the most prestigious in its field—is not one of the original prizes established by Alfred Nobel in 1895, but was endowed in 1968 by Sweden’s central bank.

For the past few years, members of the Harvard Economics Department have run a pool allowing people to predict the next winner of the Nobel Prize in Economics. But the site was shut down this year.

The site reads: “Unfortunately, we have been advised by Harvard U. to immediately shut down the Nobel pool due to legal reasons, and we have decided to comply with this request.”