US trio wins economics Nobel

The 2013 Nobel Prize for economics was awarded to three US-based men for their empirical analysis of asset prices, the Royal Swedish Academy of Sciences said Monday.

Research by Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller had helped to understand price-setting in financial markets like stocks and bonds, and prices used for index funds, the academy announced.

Eugene Fama, in collaboration with Kenneth French, has designed the so-called Fama-French three-factor model of asset pricing. The method helps investors determine market prices more accurately than with the more traditional capital asset pricing model.

Hansen has worked on a statistical method that tests the theories of asset pricing. His macroeconomic research has focused on pinpointing linkages between financial and real sectors of the economy.

Shiller's work centers on reactions to fluctuations in stock prices and corporate dividend. He has contributed to closely-watched US home price indices. In the run-up to the 2007 subprime mortgage crisis in the United States, he warned about excessive pricing in the house market.

The prize is worth 8 million kronor ($1.2 million/880,000 euros) and is not originally established by the will of the award's founder, Alfred Nobel. This prize was introduced in 1968 by the Swedish central bank, the Sveriges Riksbank, in memory of Nobel, an industrialist who invented dynamite.

All Nobel prizes are traditionally presented to the winners in a ceremony in Stockholm on December 10, the anniversary of the death of Nobel (1833-1896). Laureates receive a diploma, medal and about 8 million Swedish kronor.

The Nobel Prizes were established in Nobel's will in 1895 and are widely seen as his attempt to be remembered for something more than an invention that has caused so much destruction. The prizes in physics, chemistry, physiology or medicine, literature and peace were first awarded in 1901.

uhe/kms (AFP, Reuters, dpa)