Obligatory comment on the 2013 Nobelists

Seeing as it is very de jour to comment on this sort of thing in the econ blogosphere, here is a quick personal take:

I know that this year's laureates have raised eyebrows -- not least of all because people think that Fama and Shiller are at complete odds with one another. This doesn't strike me as especially correct. (Hansen is really the odd one out in this triumvirate, but we'll get to him in a second). For starters, and as pointed out many times over the last two days, Fama was one of the first people to publish results that ran counter to EMH predictions. Mark Thoma is exactly right in pointing out the EMH remains a really useful benchmark/framework for thinking about markets in an empirical sense. I've used it a fair bit when looking at energy and commodity markets for my own research and also when asked to to advise/comment on market trends. 

Shiller has played less of a formal role for me personally, though his housing index and his "dividend returns" data have been extremely handy tools in the blogosphere. The former is better known, but the latter is especially useful when, say, debating your average goldbug. (E.g. When dividends are taken into account, U.S. stocks have enjoyed inflation-adjusted returns of +/-1,000% since 1974. Gold, on the other hand, has yielded a rather more modest 130% over the same time period...)

The 2013 Nobelist who has had the most relevance for me, however, is Lars Peter Hansen. I suspect that this is true for many people working in economic research today, simply because the tools that he bequeathed us are so widely used in modern empirical work. Alex Tabarrok has one of the best "layman" explanations of GMM that I've seen here. Guan Yang has a more wonkish (but still accessible to anyone who is familiar with basic econometrics) exposition here.