|The Nobel Prize in Economics winners' names and pictures are shown on a slide at the Royal Swedish Academy of Sciences in Stockholm, capital of Sweden, on Oct. 14, 2013. The 2013 Nobel Prize in Economics was awarded to U.S. economists Eugene Fama, Lars Peter Hansen and Robert Shiller for their empirical analysis of asset prices, announced the Royal Swedish Academy of Sciences here on Monday. (Xinhua/Shi Tiansheng)
STOCKHOLM, Oct. 14 (Xinhua) -- U.S. economists Eugene Fama, Lars Peter Hansen and Robert Shiller shared the 2013 Nobel Prize in Economic Sciences, announced the Royal Swedish Academy of Sciences here on Monday.
The three won the award "for their empirical analysis of asset prices," said the academy.
They have found that although there is no way to predict the price of stocks and bonds over the next few days or weeks, it is quite possible to foresee the broad course of these prices over longer periods, such as three or five years, it said.
Fama, 74, and Hansen, 61, are both affiliated with the University of Chicago, while Shiller, born in 1946, is a professor at Yale University.
Starting in the 1960s, Fama and his collaborators demonstrated that stock prices are extremely difficult to predict in the short run and new information is very quickly incorporated into market prices, the academy said.
In the 1980s, Shiller found that "stock prices fluctuate much more than corporate dividends, and that the ratio of prices to dividends tends to fall when it is high, and to increase when it is low."
Hansen's contribution is the statistical method to test the rational theories of assets pricing.
In a telephone interview on site, Shiller said he did not expect the prize.
"A lot of people had 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, so I would say no, I did not expect it," he said.
"I am glad to see finance improves human welfare and we were recognized for our work. People's best activities have to be financed. There are of course imperfections in our financial system, and we try to correct it, but it will take long term," said Shiller.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the last of the six prizes announced this year, with each prize consisting of a medal, a personal diploma and a cash award of 8 million Swedish kronor (about 1.2 million U.S. dollars).
The economics award was not part of the original group of awards set out in Nobel's 1895 will and it was established by Sweden's central bank in 1968.