WASHINGTON — Three American professors — Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller — were awarded the Nobel Memorial Prize in Economic Science on Monday for showing that stock prices, while unpredictable in the short term, tend to follow established rules in the long term.
Their work, done individually rather than in cooperation, “laid the foundation for the current understanding of asset prices,” according to a statement from the Royal Swedish Academy of Sciences, which awards the annual prize.
Mr. Fama and Mr. Hansen are professors at the University of Chicago; Mr. Shiller is a professor at Yale University.
Mr. Fama, 74, was honored for showing that asset prices are “extremely hard to predict over short horizons.”
Mr. Shiller, 67, was honored for finding that prices show greater predictability over the longer term. He found that stock prices were more volatile than corporate dividends, but that the ratio of prices to dividends tended to correct back toward a central tendency.
Mr. Hansen, 60, was honored for developing a statistical method for testing and refining theories about the movement of asset prices.
Mr. Shiller, reached by phone during the press conference announcing the award, described his reaction to the news.
“Disbelief,” he said. “That’s the only way to put it.”
Their work, done individually rather than in cooperation, “laid the foundation for the current understanding of asset prices,” according to a statement from the Royal Swedish Academy of Sciences, which awards the annual prize.
Mr. Fama and Mr. Hansen are professors at the University of Chicago; Mr. Shiller is a professor at Yale University.
Mr. Fama, 74, was honored for showing that asset prices are “extremely hard to predict over short horizons.”
Mr. Shiller, 67, was honored for finding that prices show greater predictability over the longer term. He found that stock prices were more volatile than corporate dividends, but that the ratio of prices to dividends tended to correct back toward a central tendency.
Mr. Hansen, 60, was honored for developing a statistical method for testing and refining theories about the movement of asset prices.
Mr. Shiller, reached by phone during the press conference announcing the award, described his reaction to the news.
“Disbelief,” he said. “That’s the only way to put it.”