Lars Peter Hansen is an internationally known leader in economic dynamics and recipient of the 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Hansen was one of the forces behind the 2008 creation of the Milton Friedman Institute, the predecessor of this institute and served as its founding director.
Hansen is known for making fundamental advances in our understanding of how economic agents cope with changing and risky environments. He has contributed to the development of statistical methods designed to explore the interconnections between macroeconomic indicators and assets in financial markets.
The Nobel Prize recognizes this work, which has been used to test theories and models that have shaped our modern understanding of asset pricing. He shared the prize with Chicago Booth colleague Eugene Fama and Robert Shiller of Yale University.
His recent research explores how to quantify intertemporal risk-return tradeoffs and ways to model economic behavior when consumers and investors struggle with uncertainty about the future. Better models to measure risk and uncertainty have important implications for financial markets, fiscal policy, and the macroeconomy.
His early research in econometrics was aimed at developing time series statistical methods to investigate one part of an economic model without having to fully specify and estimate all of the model ingredients. The applications he explored with several coauthors included systems that are rich enough to support models of asset valuation and to identify and clarify empirical puzzles, where real-world financial and economic data were at odds with prevailing academic models. He continues to explore, analyze and interpret implications of dynamic economic models in environments with uncertainty from a time-series perspective.
Hansen joined the faculty of the University of Chicago’s Department of Economics in 1981 and has served as department chairman and director of graduate studies. He is now David Rockefeller Distinguished Service Professor of Economics, Statistics, and the College.
He is a fellow of the National Academy of Sciences and the American Finance Association. He also is a member of the American Academy of Arts and Sciences and past president of the Econometric Society.
He holds a bachelor’s degree in mathematics from Utah State University and a doctorate in economics from the University of Minnesota.