Prescott, Rose share Nobels in fields of economics, chemistry

A former professor at the University and a Chicago alumnus have received 2004 Nobel Prizes. Former Economics faculty member Edward Prescott was named a winner of the 2004 Nobel Memorial Prize in Economic Sciences Monday, Oct. 11. Irwin Rose (B.S.,’48, Ph.D.,’52) received a Nobel Prize in Chemistry Wednesday, Oct. 6.

Prescott is a professor in the department of economics at Arizona State University’s W. P. Carey School of Business. He shares the prize with Finn Kydland of Carnegie-Mellon University.

Prescott has several connections to Chicago. He was a Visiting Professor in Economics at the University from 1978 to 1979 and during Spring Quarter 1997. He was a Professor in Economics from 1998 to 1999.

He has collaborated with fellow Nobel Prize winner Robert Lucas, the John Dewey Distinguished Service Professor in Economics and the College, and other economists at Chicago. “Prescott’s 1982 Econometrica paper with Finn Kydland brought general equilibrium theory into macroeconomics in an empirically operational way, for the first time,” Lucas said.

“The paper’s influence on the way people do macroeconomics has been enormous, beneficial and irreversible. Prescott also has made major contributions to industrial organization, labor economics, financial economics and the theory of growth,” Lucas added.

In its announcement, the Nobel Committee of the Royal Swedish Academy of Sciences lauded Prescott and Kydland “for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles.”

Kydland collaborated with Prescott on his groundbreaking research on business cycles.

Prescott, known for his work on growth theory and time inconsistency, is part of a small circle of scholars that has altered the course of macroeconomic thinking in the past three decades. The span of his research includes seminal work in business cycles, economic development, general equilibrium theory and finance, and his work has addressed some of the most important questions in economics. His insights have had profound implications for the conduct of fiscal and monetary policy and even bank regulatory issues.

Prescott was on the faculty at the University of Minnesota for two decades. He earned his Ph.D. in economics from Carnegie-Mellon University.

Rose, 78, who earned his degrees in Biochemistry from the University, shares the Nobel Prize in Chemistry with Aaron Ciechanover and Avram Hershko of Technion (Israel Institute of Technology), Haifa, Israel, “for the discovery of ubiquitin-mediated protein degradation,” according to the Stockholm-based Nobel Foundation. Rose is now a professor emeritus of physiology and biophysics at the College of Medicine, University of California, Irvine. All three scientists will share this year’s $1.36 million award.

The three researchers discovered one of the cell’s most important cyclical processes: regulated protein degradation. Beginning in 1978, they began to show that the cell functions as a “highly-efficient checking station, where proteins are built up and broken down at a furious rate,” according to the release. “The degradation is not indiscriminate but takes place through a process that is controlled in detail, so that the proteins to be broken down at any given moment are given a molecular label, a ‘kiss of death.’”

The labeled proteins are then funneled into proteasomes—the cell’s waste disposers —large, cylindrical cellular machines that slice proteins into short pieces, thereby destroying them.

The researchers showed that the kiss-of-death label was a protein called ubiquitin, which cells tag onto doomed proteins. Once fastened onto a protein slated for destruction, the ubiquitin accompanies it to the proteasome, where it conveys the message that this protein has been selected for disassembly. Shortly before the protein is fed into the proteasome, its ubiquitin label is disconnected for re-use.

When ubiquitin-mediated protein degradation does not work correctly, it can result in disease, and knowledge of the process offers an opportunity to develop drugs against these diseases and others.