Lars Peter Hansen
The University of Chicago
Election Year: 1999
Primary Section: 54, Economic Sciences
Membership Type: Member
As an economist, I have studied the observable implications of models of dynamic economies, which has led to the development and implementation of methods for solving, estimating, and testing models of economic time series. I have applied these methods to characterize testable implications of models in which a large number of decision-makers interact through market mechanisms and to confront these implications with data from market economies. My initial work developed and applied statistical tools to models in which economic decision-makers predict the future without making systematic errors. Subsequently, I have studied how risk aversion in decision-making is reflected in the prices of risky assets, thus establishing empirical anomalies that challenge standard economic models. My recent research explores how individual concerns about the robustness in their beliefs about the future can help explain these anomalies.