Categories Uncategorized The 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel Post author By Seamus Coffey Post date October 14, 2013 18 Comments on The 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel Awarded jointly to Eugene Fama, Lars Peter Hansen and Robert Shiller "for their empirical analysis of asset prices". A release with “popular information” is here and one with “advanced information” is here. Related ← Red 22 on 2% Growth → Restoring Financing and Growth to Europe’s SMEs 18 replies on “The 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” As Justin Wolfers says: “Fama is the father of efficient market theory. Shiller is the father of inefficient market.” A bit Myrdal & Hayek innit? Good choices. Fama wins for ideas, Schiller wins for facts. Not a proud moment for the Fake Nobel’s. I remember some video interview in the FT where Fama announced that there not been a bubble in US housing prices after the recent financial crisis had set in. The man is a wide eyed loon. And Hansen wins for the Maths. Brad deLong reminds us on some of Fama the fanatic’s efforts to play Humpty Dumpty. http://delong.typepad.com/sdj/2013/10/eugene-fama-on-the-housing-bubble.html Sane person: In the past, I think you have been quoted as saying that you don’t even believe in the possibility of bubbles. Crazy person: People have become entirely sloppy. People have jumped on the bandwagon of blaming financial markets. I can tell a story very easily in which the financial markets were a casualty of the recession, not a cause of it. So, from people that know Do these individuals deserve the award? great to see Shiller win, he certainly deserved it. However, giving it to Fama is a step backwards and shows the committee has learned nothing from the Financial Crisis and is not adapting with the times. No one seems to have heard of Hansen so no comment there. Sane person-congrats on the award Loony leftie-c above:) From being enslaved to ordoliberals to the chains of agency theory …. I thought Fama’s time was gone – yet here he is! It is not actually intended as an award for having the most correct political views; it is for important economic research that has made a difference at the research frontier. Admittedly Fama has some fairly extreme free-market views like many academics at U Chicago but that is not related to the reasons for the award. It is for his research contribution to asset pricing theory and empirical work, which is truly immense and deeply influential. @rf — Fama and Shiller have done some really important work — Hansen’s econometric contribution seems a bit replaceable to me (rather than irreplaceable) but to be fair there is a whole sub-area of financial econometrics that used to be called “lars-ometrics” in his honour. Nice quite classy….. “But I am actually fine with the prize. Fama’s work on efficient markets was essential in setting up the benchmark against which alternatives had to be tested; Shiller did more than anyone else to codify the ways the efficient market hypothesis fails in practice. If Fama has said some foolish things in recent years, no matter — he did earn this honor, as did Shiller. As for Hansen, his work involves econometric methods on which I have no expertise at all, but I’ll trust the experts who consider it great work.” http://krugman.blogs.nytimes.com/2013/10/14/the-nobel/?_r=0 Thanks Gregory The Generalized Method of Moments, that Hansen came up, is an elegant framework for estimating many models. It is widely used in empirical microeconomics and nests a bunch of estimators both linear and non-linear. What is nice is how it links theory – and the restrictions that the model implies- with estimation. One can think of MLE,IV,OLS as GMM for example. Here’s a contrarian taken on the so-called Nobel Prize in Economics: http://exiledonline.com/the-nobel-prize-in-economics-there-is-no-nobel-prize-in-economics/ Here’s Paul de Grauwe’s tweet on this year’s prize: Nobel Prize for Fama who led millions to believe financial markets are efficient and for Shiller who showed opposite. What a contradiction. brian lucey says: “Good choices” You are either having a laugh or a complete idiot. Eugene Fama? Pure ‘effin Kafka. I really don’t know how any economist can look at this choice & not hang their head in shame. Bill Mitchell has the long version: http://bilbo.economicoutlook.net/blog/?p=25727 ‘How to fail a simple macroeconomics examination’ and RWER the short version: http://rwer.wordpress.com/2013/10/15/inefficient-financial-markets-and-an-irrational-economist-examples/ @ Mike Hall: Many thanks for those two links. The @newsroom’ clip is marvelous. Perhaps a moment for reflection might be in order as we remember the millions who suffered economic and political oppression, and the tens of thousand who were tortured and murdered, as a result of the imposition of an economic ideology that has all the characteristics of a fanatical, religious crusade. “Mark! where his carnage and his conquests cease! He makes a solitude, and calls it — peace!” Bride of Abydos [Lord Byron] Comments are closed.