Lars Peter Hansen, who got his Ph.D. at the University of Minnesota in 1978, was one of three awarded the Nobel Prize for economics early Monday morning, the Nobel Prize academy announced.
The other winners were fellow University of Chicago professor Eugene F. Fama and Yale University professor Robert J. Shiller.
The three were honored for discovering that, while stock and bond prices can't be predicted over days or weeks, it is quite possible to foresee the broad course of prices over longer periods, such as three- to five-year spans, the Nobel committee noted.
The academy says, "The Laureates have laid the foundation for the current understanding of asset prices. It relies in part on fluctuations in risk and risk attitudes, and in part on behavioral biases and market frictions."
Hansen, 60, is an economics and statistics professor at University of Chicago. There's more information about him at his University of Chicago bio page, which says Hansen is "an internationally known leader in economic dynamics."
The main theme of his research has been "to devise and apply econometric methods that are consistent with the probabilistic framework of the economic models under investigation. His work has implications for consumption, savings investment, and asset pricing," his bio says.
The U of M Department of Economics has other Nobel Laureates. Longtime U of M professor Leo Hurwicz won in 2007, according to the U. Daniel McFadden, a graduate of the U of M's Ph.D. program, received the Nobel Prize in 2000.
The U of M was recently ranked No. 11 in the nation for best schools of economics.
The Nobel economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968, and was not originally part of the group of awards established in dynamite tycoon Nobel's 1895 will, Reuters notes.