Gene Fama’s Autobiography
4 March 2010 at 12:27 pm Peter G. Klein 5 comments
| Peter Klein |
Here’s an autobiographical essay by Gene Fama written for the Annual Review of Financial Economics. Fama’s work on agency theory (with Mike Jensen) and on corporate finance (with Ken French) should be of particular interest to O&Mers, though some may disagree with his introductory claim that “[f]inance is the most successful branch of economics in terms of theory and empirical work, the interplay between the two, and the penetration of financial research into other areas of economics and real-world applications.”
Fama’s Chicago-Booth colleagues add the following note about Fama’s institutional leadership, presumably directed at today’s Fama-bashers:
Rather than rest on his laurels or impose his own views on the group, Gene has always sought the truth, even when it appeared at odds with his own views. . . . The current finance group at Chicago includes a diverse set of people who specialize in all areas of modern finance including, behavioral economics, pure theory, and emerging, non-traditional areas such as entrepreneurship and development that were unheard of when Gene arrived at Chicago. Contrary to the caricatured descriptions, there is no single Chicago view of finance, except that the path to truth comes from the rigorous development and confrontation of theories with data.
Entry filed under: - Klein -, Financial Markets, People.
Organizations and Markets 
1.
Warren Miller | 5 March 2010 at 12:48 am
Hmmmm. The Chicago School’s post-hoc devotion to an ecumenical “path to truth” was well-camouflaged when it refused Hayek an appointment in the Economics Dept. in 1950, wasn’t it? Perhaps Friedman was afraid that FAH might win the Nobel before he did? Which, of course, happened. My, my.
2.
David Hoopes | 5 March 2010 at 2:18 am
Very cool link. Incredible body of work. Certainly plenty of influence at the intersection of Os & Ms.
3.
Job Daemen | 5 March 2010 at 5:19 am
Unfortunately most Fama-bashers are ignorant of his complete body of work. If there’s one person who from day one has been concerned about empirically testing the EMH, it’s him. Fama from the beginning has noted that the EMH is a joint hypothesis in that a test of market efficiency always entails a test of a particular asset pricing model. That’s why the EMH can never be deemed true or false in the first place. Moreover the EMH is not a theory that states how markets really are, but a hypothesis regarding information and market prices. I sincerely hope that the folks in Sweden will get it right one of these years and give him his proper due.
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[…] Gene Fama’s Autobiography « Organizations and MarketsMar 4, 2010 … Here’s an autobiographical essay by Gene Fama written for the Annual Review of Financial Economics. Fama’s work on agency theory (with … […]