HYDE PARK — Monday morning, University of Chicago professor Lars Peter Hansen was out walking his dog early — at 5 a.m. — when he got a pretty exciting phone call.
It was the Royal Swedish Academy of Sciences, who wanted to let him know that he won the Nobel Prize.
Hansen, along with U. of C. professor Eugene Fama and Robert Shiller of Yale shared the prize for their economic research on predicting short-term stock price changes.
At first, Hansen didn’t believe it was real, adding that he thought the high point of his economics fame would be a passing mention in economists Thomas Sargent and Christopher Sims’ 2011 Nobel acceptance speech.
“I thought, ‘Wow, this is it, I got my moment,’” Hansen said.
He said he never thought about whether he deserved the highest honor in economics.
“That’s not for me to decide, that’s for someone else to decide — and I guess they did,” Hansen said after a packed celebration Monday morning at the university’s Booth School of Business.
Hansen looked nervous and giddy standing in front of a packed house next to a strident Fama at the public announcement of the honor.
Fama quickly disappeared after the celebration, but Hansen lingered to receive an additional congratulations from economics professor Gary Becker, who won the Nobel Prize in economics in 1992.
“You can’t believe what happens to your life, you become a celebrity,” Becker said of winning the Nobel Prize. “I recommend it to everyone.”
Both Fama and Hansen attributed their gains in the field to the culture at the University of Chicago.
“We argue vociferously, but it’s never personal, and that’s a very wonderful thing,” Fama said.
In a morning announcement of the prize, the Royal Swedish Academy of Sciences praised the decades of study that advanced the efficient market hypothesis and predicted short-term price changes.
“These findings not only had a profound impact on subsequent research, but also changed market practice,” the Nobel announcement of the prize stated. “Using this method, Hansen and other researchers have found that modifications of these theories go a long way toward explaining asset prices.”
Fama and Hansen join more than two dozen scholars at the university who have been awarded the Nobel Prize.