Nobel Prize for economics awarded to 3 Americans | CNN

Nobel Prize for economics awarded to 3 Americans

Ben Brumfield and Michael Pearson, CNN
2 minute read
Updated 8:50 AM EDT, Mon October 14, 2013
Yale University professor Robert Shiller, famous for his warnings of the housing and Internet bubbles, is one of three Americans who were awarded the Nobel Prize in economics on Monday, October 14. The Nobel committee recognized Shiller and University of Chicago professors Eugene Fama and Lars Peter Hansen for their work on the pricing of financial assets.
Nobel Prize winners of 2013 —
Yale University professor Robert Shiller, famous for his warnings of the housing and Internet bubbles, is one of three Americans who were awarded the Nobel Prize in economics on Monday, October 14. The Nobel committee recognized Shiller and University of Chicago professors Eugene Fama and Lars Peter Hansen for their work on the pricing of financial assets.
Chip Somodevilla/Getty Images
Hansen is congratulated by a friend Monday, October 14, after learning he had won the Nobel Prize. Hansen, Shiller and Fama concluded that while predicting the short-term price of stocks and bonds is virtually impossible, it is possible to forecast over longer periods.
Nobel Prize winners of 2013 —
Hansen is congratulated by a friend Monday, October 14, after learning he had won the Nobel Prize. Hansen, Shiller and Fama concluded that while predicting the short-term price of stocks and bonds is virtually impossible, it is possible to forecast over longer periods.
Scott Olson/Getty Images
Fama prepares to leave his home to teach his morning class after learning he had won the Nobel Prize on Monday, October 14.
Nobel Prize winners of 2013 —
Fama prepares to leave his home to teach his morning class after learning he had won the Nobel Prize on Monday, October 14.
Scott Olson/Getty Images
Director General Ahmet Uzumcu of the Organisation for the Prohibition of Chemical Weapons comments on the organization being awarded the Nobel Peace Prize during a press conference in The Hague, Netherlands, on Friday, October 11. The organization won the Nobel Peace Prize for its efforts to help eliminate the Syrian army's stockpiles of poison gas and it's long-time efforts to eliminate chemical weapons and weapons of mass destruction.
Nobel Prize winners of 2013 —
Director General Ahmet Uzumcu of the Organisation for the Prohibition of Chemical Weapons comments on the organization being awarded the Nobel Peace Prize during a press conference in The Hague, Netherlands, on Friday, October 11. The organization won the Nobel Peace Prize for its efforts to help eliminate the Syrian army's stockpiles of poison gas and it's long-time efforts to eliminate chemical weapons and weapons of mass destruction.
peter dejong/ap
Canadian short story writer Alice Munro, 82, was awarded the Nobel Prize in literature on Thursday, October 10. Here, Munro faces reporters after receiving the Man Booker International Prize in Dublin, Ireland, in June 2009.
Nobel Prize winners of 2013 —
Canadian short story writer Alice Munro, 82, was awarded the Nobel Prize in literature on Thursday, October 10. Here, Munro faces reporters after receiving the Man Booker International Prize in Dublin, Ireland, in June 2009.
PETER MUHLY/AFP/Getty Images/File
In awarding her the Nobel Prize, the Swedish Royal Academy of Sciences called Munro the "master of the contemporary short story." The prize committee compared her to the 19th-century Russian great Anton Chekhov. "Munro is acclaimed for her finely tuned storytelling, which is characterized by clarity and psychological realism," the committee said.
Nobel Prize winners of 2013 —
In awarding her the Nobel Prize, the Swedish Royal Academy of Sciences called Munro the "master of the contemporary short story." The prize committee compared her to the 19th-century Russian great Anton Chekhov. "Munro is acclaimed for her finely tuned storytelling, which is characterized by clarity and psychological realism," the committee said.
JONATHAN NACKSTRAND/AFP/Getty Images
Arieh Warshel, a University of Southern California professor of chemistry and biochemistry, at his Los Angeles home on Wednesday, October 9, after learning the <a href="index.php?page=&url=http%3A%2F%2Fwww.cnn.com%2F2013%2F10%2F09%2Fworld%2Feurope%2Fsweden-nobel-prize-chemistry%2Findex.html" target="_blank">Nobel Prize in chemistry</a> had been awarded to him, Martin Karplus and Michael Levitt. The three received the honor for their work in creating complex computer programs used to display intricate models of molecules.
Nobel Prize winners of 2013 —
Arieh Warshel, a University of Southern California professor of chemistry and biochemistry, at his Los Angeles home on Wednesday, October 9, after learning the Nobel Prize in chemistry had been awarded to him, Martin Karplus and Michael Levitt. The three received the honor for their work in creating complex computer programs used to display intricate models of molecules.
Nick Ut/AP
Martin Karplus describes molecular behavior as he speaks to reporters at Harvard University in Cambridge, Massachusetts, after being awarded the Nobel Prize in chemistry on October 9. The three men's work allows researchers to study chemical reactions, which take place very quickly, at a slower pace using a computer.
Nobel Prize winners of 2013 —
Martin Karplus describes molecular behavior as he speaks to reporters at Harvard University in Cambridge, Massachusetts, after being awarded the Nobel Prize in chemistry on October 9. The three men's work allows researchers to study chemical reactions, which take place very quickly, at a slower pace using a computer.
Josh Reynolds/AP
Biophysicist Michael Levitt at a news conference after winning the Nobel Prize in chemistry on October 9 at Stanford University in Stanford, California. The computer programs the men created eliminate the need for some lab testing. One example would be helping to reduce the necessity of testing a new drug on animals,
Nobel Prize winners of 2013 —
Biophysicist Michael Levitt at a news conference after winning the Nobel Prize in chemistry on October 9 at Stanford University in Stanford, California. The computer programs the men created eliminate the need for some lab testing. One example would be helping to reduce the necessity of testing a new drug on animals,
Justin Sullivan/Getty Images
François Englert, left and colleague Peter Higgs received the 2013 <a href="index.php?page=&url=http%3A%2F%2Fwww.cnn.com%2F2013%2F10%2F08%2Fworld%2Feurope%2Fsweden-nobel-prize-physics%2Findex.html" target="_blank">Nobel Prize in physics</a> for their research on a mechanism that explains why matter in the universe has mass. The physicists predicted the existence of the <a href="index.php?page=&url=http%3A%2F%2Fwww.cnn.com%2F2011%2F12%2F13%2Fworld%2Feurope%2Fhiggs-boson-q-and-a%2Findex.html">Higgs boson particle</a> nearly 50 years before its discovery.
Nobel Prize winners of 2013 —
François Englert, left and colleague Peter Higgs received the 2013 Nobel Prize in physics for their research on a mechanism that explains why matter in the universe has mass. The physicists predicted the existence of the Higgs boson particle nearly 50 years before its discovery.
FABRICE COFFRINI/AFP/Getty Images/File
Confirmation of the Higgs boson helped resolve a longstanding puzzle in the Standard Model of particle physics, a theory that lays out the basics of how elementary particles and forces interact in the universe. This image of a proton-proton collision produced in the Large Hadron Collider in Switzerland shows characteristics in line with the decay of a Higgs boson, helping prove the particle's existence.
Nobel Prize winners of 2013 —
Confirmation of the Higgs boson helped resolve a longstanding puzzle in the Standard Model of particle physics, a theory that lays out the basics of how elementary particles and forces interact in the universe. This image of a proton-proton collision produced in the Large Hadron Collider in Switzerland shows characteristics in line with the decay of a Higgs boson, helping prove the particle's existence.
CERN
Yale University professor James Rothman, pictured, shared the <a href="index.php?page=&url=http%3A%2F%2Fwww.cnn.com%2F2013%2F10%2F07%2Fhealth%2Fnobel-prize-medicine%2Findex.html" target="_blank">Nobel Prize in medicine</a> with Randy Schekman of the University of California, Berkeley, and Dr. Thomas Sudhof of Stanford University for their discoveries of how the body's cells decide when and where to deliver the molecules they produce. Rothman detailed how protein machinery allows vesicles in cells to fuse with their targets to permit the transfer of molecular cargo
Nobel Prize winners of 2013 —
Yale University professor James Rothman, pictured, shared the Nobel Prize in medicine with Randy Schekman of the University of California, Berkeley, and Dr. Thomas Sudhof of Stanford University for their discoveries of how the body's cells decide when and where to deliver the molecules they produce. Rothman detailed how protein machinery allows vesicles in cells to fuse with their targets to permit the transfer of molecular cargo
Jessica Hill/AP
Stanford University professor Thomas Sudhof talks with a journalist in Baeza, Spain, on October 7. The trio's discovery will help provide insights into diabetes, immune disorders and other diseases.
Nobel Prize winners of 2013 —
Stanford University professor Thomas Sudhof talks with a journalist in Baeza, Spain, on October 7. The trio's discovery will help provide insights into diabetes, immune disorders and other diseases.
Daniel Tejedor/AP
Randy Schekman speaks at the University of California, Berkeley, on October 7 after learning he and two others had won the Nobel Prize in medicine.
Nobel Prize winners of 2013 —
Randy Schekman speaks at the University of California, Berkeley, on October 7 after learning he and two others had won the Nobel Prize in medicine.
Josh Edelson/AFP/Getty Images
Nobel Prize winners of 2013

Story highlights

NEW: Robert Shiller warned about stock and housing bubbles, CNN Money reports

Yale's Shiller and two University of Chicago economists worked on predicting asset prices

Their work "laid the foundation for the current understanding of asset prices," committee says

"Finance drives modern civilization," Shiller says

CNN  — 

Groundbreaking research that reshaped the way economists and investors look at how markets work has earned three American professors the Nobel Prize in economics, the Royal Swedish Academy of Sciences announced Monday.

Eugene F. Fama and Lars Peter Hansen of the University of Chicago and Robert J. Shiller of Yale University received the prize “for their empirical analysis of asset prices,” the Nobel committee said.

According to the committee, the economists’ research “laid the foundation for the current understanding of asset prices.”

Their research showed that while it is difficult to predict asset prices in the short term, prices can be predicted in broad terms over longer periods, such as three to five years, according to the academy.

Director General of the OPCW, Ahmet Uzumcu comments on the organization being awarded the Nobel Peace Prize, during a press conference in The Hague, Netherlands, Friday Oct. 11, 2013. The Organization for the Prohibition of Chemical Weapons has won this year's Nobel Peace Prize, it was announced on Friday. The Norwegian Nobel Committee honored the Hague, Netherlands-based global chemical watchdog "for its extensive efforts to eliminate chemical weapons." (AP Photo/Peter Dejong)
Director General of the OPCW, Ahmet Uzumcu comments on the organization being awarded the Nobel Peace Prize, during a press conference in The Hague, Netherlands, Friday Oct. 11, 2013. The Organization for the Prohibition of Chemical Weapons has won this year's Nobel Peace Prize, it was announced on Friday. The Norwegian Nobel Committee honored the Hague, Netherlands-based global chemical watchdog "for its extensive efforts to eliminate chemical weapons." (AP Photo/Peter Dejong)
peter dejong/ap
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Their work resulted in the emergence of stock index funds – collections of assets designed to mimic the results of broader stock indexes, such as the Dow Jones Industrial. Such funds are often staples of retirement and individual investment accounts.

Shiller warned about the 1990s-era “stock bubble” and about high home prices before the decline in housing values that greatly contributed to the recession from which the U.S. economy continues to recover, CNN Money reported Monday.

Reached by phone during the news conference announcing the award, Shiller said “disbelief” was the only way to describe his reaction.

“A lot of people have told me they hoped I would win it, but I am aware that there are so many other worthy people that I had discounted it,” he said.

He said economics has broad applications to improving human welfare.

“Finance drives modern civilization,” Shiller said. “I want to see finance developed further to benefit mankind.”

The economics award was not among the original prizes created in 1895 by Swedish industrialist Alfred Nobel to honor work in physics, medicine, chemistry, literature and peace. The Central Bank of Sweden added it as a category in memory of the industrialist. The first prize was awarded in 1969.

Most of the recipients of the Nobel in economics have been born in the United States.

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