American trio share Nobel economics prize for work on asset prices

Eugene Fama and Lars Peter Hansen of the ultra-conservative Chicago school and Robert Shiller of Yale share prizeThe widespread criticism of economists' failure to predict the banking crash was addressed on Monday by the Nobel committee when it awarded the much coveted prize for economics to three academics who try to show how financial markets work.The Royal Swedish Academy of Sciences awarded the prize to Eugene Fama and Lars Peter Hansen of the ultra-conservative Chicago school alongside Robert Shiller, the liberal Yale economist famous for warning of the US sub-prime housing bubble in 2005.Fama and Hansen, two followers of Milton Friedman's free-market theories, said they were surprised to win the annual prize which they agreed would turn their lives upside down.The academy said it was honouring the three prizewinners for their work examining the way markets work. They will share the prize of Skr8m (£781,782) equally.The academy said the three economists were at the top of their field "for their empirical analysis of asset prices that greatly improved our understanding of how financial markets work, when they seem to work well and when they seem to work otherwise".Fama, 74, is notorious in leftwing circles for denying financial bubbles exist and asserting recessions are a largely unexplainable fixture of capitalism that should be allowed to take their course. His research has examined how external factors such as insider trading and government regulation can distort the ...
Source: Guardian Unlimited Science - Category: Science Authors: Tags: theguardian.com News Economics Nobel prizes Business Science Source Type: news