Robert J. Shiller Receives Deutsche Bank Prize in Financial Economics 2009

New Haven, Conn., September 30, 2009 – Robert J. Shiller, the Arthur M. Okun Professor of Economics at Yale University, receives the Deutsche Bank Prize in Financial Economics 2009, an award that carries an endowment of €50,000, today in Frankfurt, Germany. During a symposium titled "Financial Innovation and Economic Crisis" being held in connection with the award, leading financial economists, including Nobel Prize laureate Robert C. Merton of the Harvard Business School and the Center for Financial Studies (CFS) President Otmar Issing, will discuss the topics explored in Professor Shiller’s research.

"There could probably not be a more appropriate time to honor Professor Robert J. Shiller with the Deutsche Bank Prize in Financial Economics," said Josef Ackerman, Chairman of the Management Board and the Group Executive Committee of Deutsche Bank AG. "Shiller has developed instruments to gauge the extent of over-exuberance on capital and property markets. He has also used these instruments to give timely warnings on the risks of such over-exuberance." Ackerman will present the award to Shiller during an evening ceremony.

Shiller’s empirical work on asset pricing and related macroeconomic risks is of great academic and practical value. As far back as 2000, at the height of new economy euphoria, he foresaw the market collapse. He also issued an early warning about the pending bursting of the property bubble in the U.S. and the severe financial crisis arising from this development.

"I am really happy about receiving this award because it shows that my work is recognized and, above all, applied not only in academia, but also in practice," said Shiller. "Finance is a powerful technology, but a technology that has been only imperfectly applied for the betterment of humankind. There are many obstacles to the appropriate application of financial solutions. Some of them are due to institutional and regulatory rigidities, others to human psychology. As regulation has improved, we have gradually improved our application of financial technology. The financial crisis that we have recently suffered is an example of growing pains with new financial technology, but not a reason to doubt that much more financial innovation is in our future."

Shiller has played a major role in developing one of the most important property price indexes in the U.S., the Standard & Poor’s/Case-Shiller Home Price Index. He is the Arthur M. Okun Professor of Economics at Yale University, where he is affiliated with the Department of Economics, the Cowles Foundation for Research in Economics, and the School of Management and its International Center for Finance. His book Animal Spirits, co-written with Nobel Prize winner George Akerlof, was published in February. In it, he examines the importance of the human factor in the development of financial markets.

The prize sponsored by Deutsche Bank has been awarded biennially by the Center for Financial Studies, in partnership with Goethe University Frankfurt, since 2005. The award honors internationally renowned economists whose work has significantly influenced research in financial economics, and has led to fundamental advances in theory and practice.

Shiller was selected by a Jury of highly respected international financial experts. The Jury was composed of Michael Binder (Goethe University Frankfurt and CFS), Otmar Issing (CFS President), Takatoshi Ito (University of Tokyo), Jan Pieter Krahnen (Jury Chairman, Goethe University Frankfurt and Director of CFS), Reinhard H. Schmidt (Goethe University Frankfurt), Klaus Schmidt-Hebbel (Catholic University of Chile), Marti Subrahmanyam (Stern School of Business, New York University), Maria Vassalou (SAC Capital Advisors LLC and President of the European Finance Association), Norbert Walter (Chief Economist of Deutsche Bank AG) and Volker Wieland (Goethe University Frankfurt and CFS).

The first Deutsche Bank Prize in Financial Economics was presented in 2005 to Eugene F. Fama, Professor of Finance at the University of Chicago, for developing and researching the concept of market efficiency. In 2007, Michael Woodford, Professor of Political Economy at Columbia University in New York, received the award for his research on the theory of monetary macroeconomics.