When the Riksbank Prizes in Economic Sciences (a.k.a. the economics Nobels) were announced last fall, the news was greeted with some confusion and amusement. The Swedes had given the award to one guy, Eugene Fama, who is best known for originating something called the efficient market hypothesis, another guy, Robert Shiller, who once called the efficient market hypothesis “one of the most remarkable errors in the history of economic thought,” and a third guy, Lars Peter Hansen, whose work is so dense that even academic economists couldn’t satisfactorily explain it or its connection to Fama and Shiller. The prizes were awarded “for their empirical analysis of asset prices,” but what the three had been doing looked from the outside less like a common endeavor than a not-all-that-coherent argument.
Why Those Guys Won the Economics Nobels
John Campbell explains modern asset pricing theory and the links between Fama, Hansen, and Shiller.
April 02, 2014
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Strengthen your fluency in financial statements.