The Royal Swedish Academy of Sciences has a mischievous bent. At a time when everyone including the Queen of England wonders why economists did not anticipate the financial crisis and still cannot agree a cure, the academy awarded the Sveriges Riksbank Prize (it is not technically a Nobel) to two American professors synonymous with economic modelling. It is popular to question Thomas Sargent’s line of work these days. In the 1970s, he revelled in the complex economic models that were the foundation of the so-called dynamic stochastic general equilibrium models now ubiquitous in central bank decision making. More important, he introduced into these models the burgeoning field of rational expectations – another idea increasingly under fire.

But to blame the current economic problems in the US or Europe on policymakers’ over-reliance on models is unfair. Few think neuroscientific research is pointless just because we still know so little about the brain. In a speech last year, Christopher Sims, the co-prize winner, highlighted the many academics now focused on improving these models to understand better how financial shocks affect the economy. A little late, but a worthy aim nevertheless.

Forecasting will remain hard. Each crisis, however, brings more data to analyse. Prof Sims, for example, won his gong for advancing the crunching of numbers to draw out causes and effects of economic changes or shocks. This is useful stuff, whatever its predictive power. Both laureates have advanced their early work. Prof Sargent now recognises that people get confused sometimes, while Prof Sim models the fact that we all can only take in so much information while thinking about the future.