Nobel Prize for economics awarded for work on asset prices
Eugene Fama, Lars Hansen, and Robert Shiller have been awarded this year’s Nobel Prize for economic sciences for their work on “empirical analysis of asset prices”.
Officially known as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the prize was being awarded for the work the three men did since the 1960s in analysing and spotting trends in asset pricing.
specifically, Fama and Hansen (both at the University of Chicago), and Shiller (Yale University) found that it is possible to foresee the broad course of prices of stocks and bonds over three to five year periods, even though it is impossible to predict price moves over periods of a few days or weeks.
“The Laureates have laid the foundation for the current understanding of asset prices. It relies in part on fluctuations in risk and risk attitudes, and in part on behavioral biases and market frictions,” the awarding committee said.