Interview with Nobel Laureate Lars Peter Hansen

Lars Peter Hansen, an internationally known leader in economic dynamics, guides the scholarly direction of the institute and chairs the Institute Research Council. Hansen was one of the forces behind the 2008 creation of the Milton Friedman Institute, the predecessor of the Becker Friedman Institute for Research in Economics; he served as its founding director.
Hansen shared the 2013 Nobel Prize in Economics with Chicago Booth colleague Eugene Fama and Robert Shiller of Yale University. Held together, the trio's work--Fama's examination of the efficient market hypothesis, Shiller's examination of the effects that irrational behavior has within those markets, and Hansen's statistical tests of each of their theories to tie them to empirical data--form the basis of our modern understanding of asset pricing.
Interviewee(s): Lars Peter Hansen
Recorded on October 21, 2013 in the University of Chicago.
Interview Questions:
Question 1:
What is the importance of empirical methodologies to economic thinking?
Question 2:
The empirical methods you developed were cited by the Nobel committee "for the empirical analysis of asset prices." But I understand your empirical methods have been applied in other areas of economics. Which areas? And what do you think have been important contributions?
Question 3:
What is the importance of incorporating the finance sector into current-day macroeconomic models? What implications, if any, did the lack of connection between financial crisis and policy-makers' ability to understand and respond to the crisis?
Question 4:
Do you think that the global economy has become too focused on finance?
What are the dangers of a finance-centric economy?
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