After 23 years at the University, economics professor Edward Prescott is leaving for Arizona State University, and the economics department faculty are smarting from the loss.

“It’s a big loss to the department,” said economics department Chairman Ed Foster. “He was a very valued member.” Foster said the loss will also hurt the department’s student and faculty recruitment efforts.

“He is an extraordinary economist, teacher and colleague,” said economics professor V.V. Chari, a former student of Prescott’s.

Last year, Prescott won the Erwin Plein Nemmers Prize in Economics – an award generally reserved for economists believed to be future contenders of the Nobel Prize – and many also credit him with changing the course of macroeconomic thinking in the last three decades.

“Prescott’s ideas have transformed macroeconomics,” said Tom Sargent, a New York University economics professor who taught with Prescott at the University between 1971 and 1987.

Sargent said many of Prescott’s papers made fundamental breakthroughs that are still discussed. He also said Prescott is one of the best teachers in the field.

Prescott, who is currently on sabbatical from his University position, will begin teaching at Arizona’s WP Carey School of Business in March.

Prescott said he is looking forward to the challenge the new position will offer and that he is hoping to build something special there.

“The role of the university is creation and diffusion of knowledge. To do well you have to create,” Prescott said.

Arizona State economics department Chairman Arthur Blakemore said Prescott will be a “key building block” to the department.

“He’ll be a terrific asset to us. He has great energy and is a great mentor to students,” Blakemore said.

He also said Prescott’s presence will help attract more faculty and graduate students to the program.

Prescott will retain his position as adviser in the research department at the Federal Reserve Bank of Minneapolis for six months out of the year.