歌词
From VOA Learning English,
this is the Economics Report.
This week, the Royal Swedish Academy of Sciences
awarded the Nobel Prize in economics to three Americans.
The academy recognises the three men for their work
in the study and understanding of
how things are priced in financial markets.
Eugene Fama and Lars Peter Hansen
are both professors at the University of Chicago.
Robert Shiller is a professor at Yale University.
They will share the prize worth about 1.2 million dollars.
The academy's permanent secretary Staffan Normark
offered a short explanation of why the men won the award.
"This year's prize in economic sciences is about predictions."
Predicting prices is something
everyone involved in markets wants to do.
This is especially true for financial markets
when money managers invest millions of dollars
for their clients and customers.
All three of this year's prize winners
are mainly known for their research
and explanations of pricing forces in financial markets.
They have had a big influence on the way people look at
and talk about financial markets.
But what might be surprising is that Eugene Fama
and Robert Shiller receive the prize for findings
that appear to oppose one another.
The Swedish Academy however found
that the underline idea of predict ability
tied the work of all three winners together closely.
Eugene Fama's research on financial markets in the 1960s
led market watchers to change their ideas about investing.
His ideas are linked to the theory that markets are efficient,
that means market actors taking all available information
to create the correct price for things at any given time.
This also means that over short periods of time,
it is not possible to predict prices.
Robert Shiller found however that over long periods,
the opposite is true.
It is possible to predict the movement of prices
and that its changes are linked to human behaviour.
The findings of both economists
have led to the growth of index funds.
Index funds investing many different securities
as a way to reduce risk.
Mr Shiller also helped to create
the Standard & Poor's Case-Shiller home prices index.
That index follows home prices across the United States.
Lars Peter Hansen developed the method
for studying historical pricing information.
His methods support Mr Shiller's findings
and has an influenced efforts to predict prices
in the financial industry.
The Nobel Prize in economics was not created by Alfred Nobel,
but was established in his memory
by Sweden's central bank in 1968.
And that's the Economics Report from VOA Learning English,
I'm June Simms.