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Utah State University alum wins Nobel Prize in economics

Published October 14, 2013 9:41 pm

Economics • The work of three U.S. scholars helped sound warnings on the dot-com, housing bubbles.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Lars Peter Hansen was heading out the door for an early workout Monday when he got a 5:50 a.m. call from Sweden.

The Utah State University alum was one of three people to win the 2013 Nobel Memorial Prize for economics.

"It was really a nice surprise," Hansen said in a phone interview Monday from his University of Chicago office. "At first I was wondering if this is for real."

Then a colleague from Sweden got on the phone and confirmed the news. "It was quite exciting," he said.

He shares the $1.23 million prize with two other Americans: Eugene Fama, his colleague at the University of Chicago, and Robert Shiller of Yale University.

The three showed that while there is no way to predict short-term stock and bond prices, it is possible to forecast those prices over longer periods, say three to five years. Their work sounded warnings ahead of the Internet stock bubble in the 1990s and the housing collapse that preceded the recent financial crisis.

But before he was placed among the most-respected thinkers in the world, Hansen was a less-than-stellar Logan High student.

"I was not the best high school student in the world," he said. "I would get double check marks for 'Does not respect authorities.' "

He called USU "a turning point." His professors there, especially Mike Windham in math, Bartell Jensen in economics and Doug Alder in history, changed his academic trajectory.

Alder "would tell me, 'Don't do things like everyone else. You have your skills, go and do something different,' " Hansen said. "I found that to be very useful. I always kept that in my mind."

He didn't begin studying economics until his junior year at USU, but in it found a discipline that brought together his studies in history, political science and mathematics. He graduated with a degree in mathematics and political science in 1974.

Hansen, 60, went on to earn a doctorate in economics at the University of Minnesota in Minneapolis. After a teaching stint at Pittsburgh's Carnegie Mellon University, he joined the University of Chicago faculty in 1981.

Jenson taught Hansen about using math to develop models to explain economic behavior, a field in which Hansen continued and won the Nobel.

"Lars is not only a scholar, he's a genuine gentleman," Jenson said. "He's a very kind and compassionate person, and humble."

Hansen was born in Illinois, to Anna Lou Rees and R. Gaurth Hansen, a respected biochemist who returned to Utah with his family in 1968 and became a provost at USU.

Douglas Anderson, dean of USU's Jon M. Huntsman School of Business, was one of Hansen's classmates.

"He was an all-star from the very beginning. He was clearly a cut above everyone else," Anderson said. "Lars would think his way through the complexity and come through to the simplicity on the other side."

lwhitehurst@sltrib.com

Twitter: @lwhitehurst