Congratulations Gene Fama, Lars Hansen and Bob Shiller

The Nobel Prize Committee chose very well in awarding the prize for the important individual contributions of each economist.  And focusing on the group as a whole makes sense too. Fama put forth the efficient market idea that securities prices incorporate available relevant information, Shiller showed that in some important cases there were deviations from the theory either due to less than rational expectations or behavioral factors, and Hansen developed and applied new statistical techniques to test the different theories and take risk into account.  And because of all three, we have made progress in understanding how asset markets work with people incorporating the results into practical work.

It is a good teaching moment for Economics 1 students.

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