Overview

Lars Peter Hansen (born 26 October 1952) is an American economist noted for his work in econometrics and empirical asset pricing. He holds the David Rockefeller Distinguished Service Professorship in economics at the University of Chicago and was a co-recipient of the 2013 Nobel Prize in Economic Sciences for contributions to the empirical analysis of asset prices.

Major contributions

Hansen is best known for developing the generalized method of moments (GMM), an estimation approach that uses moment conditions derived from economic models to estimate parameters and test hypotheses. GMM became a standard tool across macroeconomics and finance because it allows researchers to confront models with data without relying on strong distributional assumptions.

Research areas and impact

His research spans several fields: financial econometrics, macro-finance, and statistical methods for model evaluation. Hansen’s work focuses on linking theoretical models of risk and return to observed asset prices, improving the way economists measure model fit and inference in the presence of complex dynamics and uncertainty.

Uses and examples

GMM and related techniques are applied to estimate consumption-based asset-pricing models, term-structure dynamics, volatility models, and the empirical implications of macroeconomic shocks. Practitioners value these tools for testing whether a proposed mechanism can generate observed patterns in returns, consumption, and macro variables.

Honors, context and further reading

Hansen’s 2013 Nobel Prize was awarded jointly with Eugene F. Fama and Robert J. Shiller for empirical analysis of asset prices, recognizing complementary approaches to understanding market behavior. For a concise overview of his work and publications, see his University profile, selected papers at research listings, and an external professional page or CV at official page.

  • Key method: Generalized Method of Moments (GMM)
  • Fields: Econometrics, macroeconomics, finance
  • Notable recognition: Nobel Prize in Economic Sciences (2013)