Americans Eugene Fama, Lars Peter Hansen and Robert Shiller won the Nobel prize for economics on Monday for developing methods to study trends in stock, bond and housing markets.
The Royal Swedish Academy of Sciences said that through their separate research, the three had laid the foundation of the current understanding of asset prices and changed the way people invest.
While it’s hard to predict whether stock or bond prices will go up or down in the short term, it’s possible to foresee movements over periods of three years or longer, the academy said.
“These findings, which might seem surprising and contradictory, were made and analyzed by this year’s laureates,” the academy said.
Fama, 74, and Hansen, 60, are associated with the University of Chicago. Shiller, 67, is a professor at Yale University.