

3 US economists win Nobel for work on asset prices (VIDEO)


October 14th, 2013 in News



Eugene Fama and Lars Peter Hansen of the University of Chicago and Robert Shiller of Yale University were honored for shedding light on the forces that move stock, bond and home prices - findings that have transformed how people invest.


"Fama's work was incredibly fundamental in the '60s and '70s," said David Warsh, who follows economists at his Economic Principals blog. "It led to enormous practical change in terms of people not buying particular stocks but buying index funds."






Fama and Shiller "provide the ends of the spectrum" between those who believe financial markets are efficient and those who think them deeply flawed, with Hansen "in the middle doing the math," said Allen Sanderson, a University of Chicago lecturer in economics.


"Their methods have shaped subsequent research in the field, and their findings have been highly influential both academically and practically," the Royal Swedish Academy of Sciences said in Stockholm.






Collectively, Fama, Shiller and Hansen didn't create a simple, unified theory of how financial markets work. Rather, they worked like "blind men feeling an elephant" - each finding a bit of the truth in a vast and complicated field, Sanderson said.

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