US economists win Nobel prize
Awarded prize for research that has improved the forecasting of asset prices
Photos of the 2013 Nobel Prize laureates in Economic Sciences Eugene Fama (L-R), Lars Peter Hansen and Robert Shiller are displayed during a news conference at the Royal Swedish Academy of Sciences in Stockholm today. The three American scientists won the 2013 economics Nobel prize for research that has improved the forecasting of asset prices in the long term and helped the emergence of index funds in stock markets, the award-giving body said. Photograph: REUTERS/Claudio Bresciani/TT News Agency
Three American scientists have won the 2013 economics Nobel prize for research that has improved the forecasting of asset prices in the long term and helped the emergence of index funds in stock markets, the award-giving body said.
“There is no way to predict the price of stocks and bonds over the next few days or weeks,” The Royal Swedish Academy of Sciences said in awarding the 8 million crown (€0.9 million) prize to Eugene Fama, Lars Peter Hansen and Robert Shiller. “But it is quite possible to foresee the broad course of these prices over longer periods, such as the next three to five years. These findings ... were made and analyzed by this year’s Laureates,” the academy said.
Shiller helped create a closely watched gauge of US housing prices and in June this year warned of a potentially new housing bubble in some of America’s largest cities.
Fama, tipped as a Nobel winner for many years, has been called the father of modern finance and is well-known for research showing that certain groups of stocks tend to outperform over time. The behaviour of asset prices are key to decisions such as savings, house buying and national economic policy, the academy said.
“Mispricing of assets may contribute to financial crises and, as the recent global recession illustrates, such crises can damage the overall economy,” it added. Fama and Hansen are professors at the University of Chicago, while Shiller is a professor at Yale University.
“A lot of people had told me they hoped I would win it, but I am aware that there are so many other worthy people that I had discounted it, so I would say no, I did not expect it,” Schiller told a news conference. The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel’s 1895 will.