Lars Peter Hansen
Lars Peter Hansen, a former Carnegie Mellon University professor, shares the 2013 Nobel Prize in Economic Science.
Hansen, the David Rockefeller Distinguished Service Professor of Economics at the University of Chicago and former faculty member at Carnegie Mellon University, has been honored with the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel with two distinguished research colleagues, Eugene F. Fama, the Robert R. McCormick Distinguished Service Professor of Finance at the University of Chicago, and Robert J. Shiller, the Sterling Professor of Economics at Yale University, "for their empirical analysis of asset prices."
Hansen joined the faculty at the Tepper School of Business, then the Graduate School of Industrial Administration (GSIA), in 1978, conducting research and teaching until 1981. He is the 19th Nobel Laureate with ties to Carnegie Mellon.
"I feel very lucky," Hansen was reported to have said by the University of Chicago after learning he had received the prize. "I've had great family support to make this happen. I've had some great mentors and some great students and colleagues."
In addition to Hansen, the Nobel Prize in Economic Sciences has been awarded to 10 researchers with CMU ties including faculty members Herbert A. Simon, Franco Modigliani, Merton H. Miller, Robert E. Lucas, Jr., Finn E. Kydland (T'73), Edward C. Prescott (T'67); and alumni Oliver Williamson (T'63), Dale Mortensen (T'67) and John F. Nash, Jr. (S'48).
The prize committee recognized Hansen's research in advancing the understanding of the behavior of asset prices. Hansen's achievements in developing new statistical methods for testing the practical relevance of economic theories are recognized in specific application to asset pricing. Moreover, research in virtually every area of economics uses methods that Hansen has developed.
His creation of a close and deep connection between economics and statistics has given rise to several groundbreaking works in financial economics that include ties to CMU.
In 1982, he published "Generalized Instrumental Variables Estimation of Nonlinear Rational Expectations Models," co-authored by Kenneth J. Singleton, a faculty member from 1980 to 1987. This work was celebrated at CMU in 2007 at a special conference on its 25th anniversary. He also has been recognized for work with Ravi Jagannathan (T'83) that created the "Hansen-Jagannathan Bound," an important theorem in financial economics.
Per Stromberg, who received his Ph.D. at the Tepper School in 1997 and is a member of the Economic Sciences Prize Committee, offered the overview of the Nobel Prize at the press conference.