A very personal Nobel Economics Prize column
I did not put my money where my mouth was on a betting site, but I really felt that my undergraduate thesis adviser, Robert (Bob) Shiller, who had given me my first economics job, would nail it this
So much so that, knowing the winner(s) of the Nobel Prize in economics would be revealed on Oct.14, I checked my inbox right after breakfast in Trinidad, Cuba, to find the most recently received email in my inbox was from the Financial Times, announcing that he had won it.
Shiller shared the award with fellow economists Eugene Fama and Lars Peter Hansen for their work on what drives asset prices- although Fama and Shiller had come to different conclusions on the matter. It was not a big surprise that Shiller had won it. He has been a favorite for the past several years - and for good reason. He was one of those who advanced the fields of behavioral economics and finance by
showing that people are, unlike Star Trek’s Mr. Spock, not rational “supercomputers”- even though Daniel Kahneman had already got the prize for that in 2002.
Shiller has also been a great forecaster. He wrote his bestseller, “Irrational Exuberance”, shortly before the dotcom-boom busted, and then applied the same ideas in 2007 to argue that the housing market was overvalued. Bull’s eye twice!
I met Shiller when I took his corporate finance class during my junior year at Yale. I got his attention when I answered his question on the Ramanujan number, and after doing well in his class, I was able to convince him to take me on as his research assistant. I helped him on a paper about resistance to inflation indexation over the summer.
One of my fondest memories at Yale was when Shiller had me present parts of the paper at a workshop in the fall. When we had finished, the late James (Jim) Tobin, Nobel Economics winner in 1981, asked us a question. There wasn’t a single sound in the entire room, given the extent to which the venerable economist is revered. It is a great memory in retrospect- a question from a Nobel winner to a future one.
Shiller was part of one of my saddest moments at college as well. I arrived at home one day to find a voicemail from him, saying that my teaching assistant at the corporate finance class had died. Aslak
Aunstrup, who was also Shiller’s advisee, took his own life. Shiller invited me to the memorial service at Yale, thinking that Aslak’s parents would like to meet one of his students as well. Aslak always spoke so fondly of Shiller. After I started writing for the Hürriyet Daily News, I never forgot the false claims of a Yale student newspaper that attributed Aslak’s death to excessive pressure from his adviser (in turn driving Aslak to suicide) – It was from that point forward that I never wrote or claimed anything without sufficiently attributing it to a credible source. Now you know the reason behind my zeal in graphs and numbers.
The work I did for Shiller, and separately for Tobin, during the summer of 1996, convinced me to go on to graduate school in economics. I am eternally grateful to them for the passion they infused in me
(and the recommendations they wrote) - so much so that I could not bring myself to take the week off during my vacation in Cuba.