Lars Peter Hansen
Born: 26 October 1952, Urbana, IL, USA
Affiliation at the time of the award: University of Chicago, Chicago, IL, USA
Prize motivation: "for their empirical analysis of asset prices"
Field: econometrics, financial economics
Prize share: 1/3
For many of us, the rise and fall of stock prices symbolizes economic development. Eugene Fama demonstrated that stock price movements are impossible to predict in the short-term, while Robert Shiller discovered that stock prices can be predicted over a longer period. In 1982, Lars Peter Hansen developed a statistical method for testing this type of theory. He demonstrated that Shiller's results could not be fully explained within the then-current models and Hansen's method is now used within all economics research.