An American and a Briton won the Nobel Prize in economics Wednesday for developing statistical tools that have improved the forecasting of economic growth, interest rates and stock prices.

Robert F. Engle (search) becomes the fourth consecutive American to receive the economics award since 2000. He shares the honor -- and the $1.3 million prize -- with Clive W.J. Granger (search). They were colleagues for decades at the University of California at San Diego.

The Royal Swedish Academy of Sciences (search) said Engle and Granger devised new methods for measuring volatility, or the rate at which prices, interest and other economic variables move up and down.

Engle's work in what is known as "economic time series" resulted in models that "have become indispensable tools not only for researchers, but for analysts on financial markets, who use them in asset pricing and in evaluating portfolio risk," the academy said.

It said Granger focused on nonstationary time series, which help analysts adjust their data for the long-term effects of short-term phenomena. This has improved research in areas such as wealth and consumption, exchange rates, price levels and short- and long-term interest rates, the academy said.

Also Wednesday, Americans Peter Agre and Roderick MacKinnon won the Nobel Prize in chemistry for studies of tiny transportation tunnels in cell walls -- work that illuminates diseases of the heart, kidneys and nervous system.

Granger, 69, a native of Swansea, Wales, retired from UCSD on June 30. The university said he is a visiting scholar at Canterbury University in New Zealand. He could not immediately be reached for comment.

Engle, 60, a native of Syracuse, N.Y., earned his Ph.D. in economics at Cornell University in 1969 and taught in San Diego for 25 years before moving in 2000 to teach finance at the Stern School of Business at New York University. He is on sabbatical in Europe, where he is giving a series of lectures.

Reached by telephone at his home in Annecy, France, Engle told The Associated Press that award has been "the treat of a lifetime."

Granger, also reached by telephone, said he was only sure he had won the prize when a colleague called him from Sweden in the early hours of the New Zealand morning. Until then, the British economist thought the call from the Nobel committee could have been a hoax.

"There have been some famous hoaxes in this situation," Granger said.

He said the colleague passed the phone to members of the committee, "and I know one of them rather well, so when I heard his voice I knew it wasn't a hoax so I was then cheerfully relaxed."

Peter Englund, a banking and insurance professor at the Stockholm Institute for Financial Research, said the two men's research has helped economists and financial experts "measure and estimate volatility and how volatility varies over time," which is especially important in market analysis.

Past Nobels have recognized research on topics ranging from poverty and famine to how multinational corporations reap profits.