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Greg Mankiw reports that Eugene Fama is, according to a betting agency, the favourite to win the Nobel Prize for economics this year.
If this were a prediction market rather than an old-school betting agency, I would be heavily short on this contract - I just don't think this is likely. Not because I don't think Fama is an excellent candidate and thoroughly deserving of a Nobel - he is basically the father of modern finance. However, Nobels measure largely the influence someone has had on their profession - and since the financial crisis I think it's safe to say that Fama's Efficient-Market Hypothesis is not at the peak of its popularity (although I am still a fan). For that reason, Fama would be a pretty controversial pick.
The same reasoning applies to Kenneth French, who is also quite high up.
Who will win it then? I don't know. I'm also sceptical of Paul Romer (who is just behind Fama on the odds), so my bet would be with Ernst Fehr, whose work on behavioural finance and neuroeconomics is looking pretty good about now.
That said, I hope to be proven wrong and see Fama win, I think he's awesome. Here's an interesting video interview with him about his life.
Friday, October 9, 2009
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I agree - I wonder whether it would be a Fama/French combo when it does happen, but now is probably not the hour.
ReplyDeleteKen French, in addition to his work, is a remarkable lecturer. I was lucky enough to have him unlock the mysteries of Finance in a first year MBA course. Top of the list was his way of teaching the value of options - using a prisoner at the end of his term, two women and promises of marriage.
Fama/French would probably be my pick as well - that might also give them a way of kind of diverting attention entirely from the EMH to their later stuff as a reason for the prize.
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