Q&A with USU Nobel Prize winner
After becoming one of the 2013 class of Nobel Laureates, Lars Peter Hansen, a 1974 graduate from USU, took a moment to respond to a few questions sent his way by The Utah Statesman.
Utah Statesman: What was your initial reaction?
Lars Peter Hansen: First I wanted to make sure this was real. I was very surprised and did not expect it. I feel very lucky.
Utah Statesman: Who was your biggest influence?
Lars Peter Hansen: Some of my biggest influences were my former teachers, Thomas J. Sargent and Christopher Sims, who shared the Nobel Prize in 2011. As a graduate student at the University of Minnesota in the 1970s, I was a research assistant for both: Sims became my advisor and Sargent was a member of my dissertation committee. Since then, Sims, who teaches at Princeton University, has had a major influence on my research and Sargent, at New York University, has been my long-term collaborator.
Starting in the 1970s, Sargent and Sims began to publish their remarkable contributions, which combined macroeconomic models with time series analysis in a unique way to address relevant policy questions in macroeconomics. I was fortunate to have a front-row seat to observe the development of their path-breaking research.
I’ve also learned a lot from my colleagues here at the University of Chicago. I’ve had Gary Becker, Robert Lucas and Jim Heckman as role models, and benefitted from the insights of many others.
Also, I’ve been very lucky to have a long list of very good graduate students over the years. You might think that graduate students show respect for their advisors. I’ve always found that most of my best students are more than happy to tell me where I was wrong and point out gaps in my understanding. My graduate students over the years have been some of my best colleagues
Utah Statesman: Where do you go from here?
Lars Peter Hansen: My work uses statistical methods to try to understand the connections between financial markets and the economy as a whole.
The questions that fascinate me look at sets of circumstances where investors have rational beliefs about their choices and where they are uncertain and worried about risks in the future. I’m interested in how that uncertainty and risk aversion gets coded into asset prices.
One thing that interests me now is that people are rushing to create policies to regulate the financial system and manage risks to the economy, but we’re doing this without very much information.
I’m involved in leading a couple interconnected research initiatives at the Becker Friedman Institute where we’re trying to develop better models and tools to measure and monitor those systemic risks and understand the impact the uncertainty on the nation’s fiscal situation.
-zack.oldroyd@aggiemail.usu.edu