About

Lars Peter Hansen is a leading expert in economic dynamics who works at the boundaries of macroeconomics, finance, and econometrics. His current collaborative research develops and applies methods for pricing the exposure to macroeconomic shocks over alternative investment horizons and investigates the implications of the pricing of long-term uncertainty. Moreover, he studies the econometric challenges of identifying investor beliefs from observed asset prices.

Research topics

• Political Science
• Economics
• Law
• Computer Science
• Positive economics
• Medicine
• Ecology
• Economic history
• Virology
• Geography
• Economic policy
• Psychology
• History
• Environmental ethics
• Biology
• Business

Selected publications

• Sex-specific associations between resting heart rate trajectories and all-cause heart failure

  European Journal of Preventive Cardiology · 2025-05-01

  articleOpen access1st authorCorresponding

  Abstract Background/Introduction Although sex differences in heart failure subtypes and risk factors are acknowledged in preventive guidelines, it is unclear if there are differences in potential prognostic markers like resting heart rate trajectories. Purpose We aimed to investigate sex-specific associations between trajectories of longitudinal resting heart rate and all-cause incidence of heart failure in adult Norwegians. Methods We followed 48194 participants who attended two or three surveys between 1995-2017 for incidences of heart failure until 30 March 2023. We used latent class models to determine resting heart rate trajectories groups, Bayesian information criterion to choose the model with best fit and highest posterior probability to assign groups. Using Cox proportional hazard models, we estimated hazard ratios and 95% confidence intervals (CI). Results During 12±3 years of follow-up, 3359 participants developed heart failure. Women’s overall incidence rate per 1000 person-years was lower than men’s (4.87 vs. 6.63, incidence rate ratio 1.36 (95% CI: 1.27-1.46)). We identified three sex-specific resting heart rate trajectories. Women’s resting heart rate trajectories were consistently higher than men’s: low trajectory (65.3-66.9 versus 61.4-62.5 beats per minute), moderate trajectory (79.5-80.9 versus 75.2-76.6 beats per minute) and high trajectory (97.0-98.0 versus 91.2-92.3 beats per minute). Women and men with a high resting heart rate trajectory had 40% and 34% (95% CI: 10-78% and 11-62%) higher risk of incidence heart failure, respectively, compared to the low resting heart rate trajectory. Men in the moderate resting heart rate trajectory had 14% (95% CI: 4-26%) higher risk of incidence heart failure than men in the low trajectory, while women had no such association. Conclusion Women and men with a high resting heart rate trajectory, and men with a moderate resting heart rate trajectory, had a higher risk for developing heart failure compared to a low resting heart rate trajectory. Our findings emphasize the relevance of repeated resting heart rate and sex-specific analyses to assess heart failure risk over time.

  PublisherOA PDFDOI

• Emission prices, biomass, and biodiversity in tropical forests

  SSRN Electronic Journal · 2025-01-01

  preprintOpen access1st authorCorresponding
  PublisherDOI

• Robust inattentive discrete choice

  Proceedings of the National Academy of Sciences · 2025-02-07 · 1 citations

  articleOpen access1st authorCorresponding

  Rational inattention models characterize optimal decision-making in data-rich environments. In such environments, it can be costly to look carefully at all of the information. Some information is much more salient for the decision at hand and merits closer scrutiny. The inattention decision model formalizes this choice and deduces how best to navigate through the potentially vast array of data when making decisions. In the rational formulation, the decision-maker commits fully to a subjective prior distribution over the possible states of the world that could be realized. We relax this assumption and look for a robustly optimal solution to the inattention problem by allowing the decision-maker to be ambiguity averse with respect to this prior. We feature a setup that is deliberately simple by a) assuming a discrete set of choices, b) using Shannon's mutual information to quantify attention costs, and c) imposing relative entropy with respect to a baseline probability distribution to quantify prior divergence. We provide necessary and sufficient conditions for the robust solution and develop numerical methods to solve it. In comparison to the rational solution with no prior uncertainty, our decision-maker slants priors in more cautious or pessimistic directions when deducing how to allocate attention over the range of available information. This approach implements a form of robustness to prior misspecification, or equivalently, a form of ambiguity aversion. We explore some examples that show how the robust solution differs from the rational solution with a commitment to a subjective prior distribution and how it differs from imposing risk aversion.

  PublisherOA PDFDOI

• Emission Prices, Biomass, and Biodiversity in Tropical Forests

  AEA Papers and Proceedings · 2025-05-01

  article1st authorCorresponding

  We investigate how external emission prices influence robustly optimal reforestation in the Brazilian Amazon and the biodiversity impacts. Extending the findings of Assuncao et al. (2023), we revisit their spatial-dynamic model of land allocation under uncertainty. Their analysis reveals that financial transfers of $25 per ton of CO2e can shift the Amazon from emitting 17 gigatons of CO2e to capturing 18 gigatons over 30 years. Our study expands this work by integrating scientific insights to evaluate biodiversity outcomes, highlighting the broader ecological benefits of emission pricing as a mechanism for achieving both carbon sequestration and biodiversity conservation.

  PublisherDOI

• Stochastic responses and marginal valuation

  Proceedings of the National Academy of Sciences · 2025-11-24

  articleOpen access1st authorCorresponding

  The analysis of policy impacts in a dynamic and uncertain reality is vital to supporting informed economic policy design and implementation. Dynamic, stochastic economic models used in policy evaluation necessarily simplify the world as we know it. This motivates us to explore, refine, and extend tools aimed at producing marginal valuations that shed light on why some policies are optimal and how others, though suboptimal, can be improved. We present representations of these marginal valuations that embrace uncertainty and support robust implementation-even in environments characterized by "deep uncertainties." These representations offer a more complete understanding of how interactions among multiple state variables, concerns about model misspecification, and uncertainties surrounding potentially long-term implications contribute to the cogent assessment of policies. We argue that these methods are particularly salient for evaluating the global cost of climate change and the global value of research and development with long-term prospects for success.

  PublisherOA PDFDOI

• Data and Code for: Emission Prices, Biomass, and Biodiversity in Tropical Forests

  ICPSR Data Holdings · 2025-01-01

  datasetOpen access1st authorCorresponding

  The prudent reforestation of tropical rain forests depends on alternative land uses, the dynamics of carbon accumulation of forest trees, and the implicit social cost of emissions. In this paper, we discuss and extend recent research by Assunção et al. (2023) showing that arguably modest foreign transfers per unit of carbon captured could incentivize substantial reforestation in areas currently used for low-productivity cattle ranching in Brazil. Building on this research, we initiate the study of the relationship between externally set emission prices and changes in biodiversity and biomass. The Amazon holds 10 percent of the world’s vertebrate and plant species. There are more than 15,000 tree species, the vast majority of which are rare. Drawing on the scientific literature on rain forest biodiversity, we provide some preliminary estimates of how carbon pricing could affect biodiversity in the Brazilian Amazon.<br><br>

  PublisherDOI

• Robust Inattentive Discrete Choice

  SSRN Electronic Journal · 2024-01-01

  articleOpen access1st authorCorresponding
  PublisherDOI

• Comparative Valuation Dynamics in Production Economies: Long-Run Uncertainty, Heterogeneity, and Market Frictions

  Annual Review of Financial Economics · 2024-09-26 · 5 citations

  articleOpen access1st authorCorresponding

  We compare and contrast production economies exposed to long-run uncertainty with investors that have possibly different preferences and/or access to financial markets. We study the macroeconomic and asset-pricing properties of these models, identify common features, and highlight areas where these models depart from each other. Our framework allows us to investigate more fully the impact of investor heterogeneity, capital heterogeneity, and fluctuations of the growth components to the capital evolution as they affect the dynamics of macroeconomic quantities and asset prices. In our comparisons, we employ an array of diagnostic tools to explore time variation and state dependencies in nonlinear environments.

  PublisherDOI

• Robust inference for moment condition models without rational expectations

  Journal of Econometrics · 2024-01-25 · 9 citations

  articleOpen access

  Applied researchers using structural models under rational expectations (RE) often confront empirical evidence of misspecification. In this paper we consider a generic dynamic model that is posed as a vector of unconditional moment restrictions. We suppose that the model is globally misspecified under RE, and thus empirically flawed in a way that is not econometrically subtle. We relax the RE restriction by allowing subjective beliefs to differ from the data-generating probability (DGP) model while still maintaining that the moment conditions are satisfied under the subjective beliefs of economic agents. We use statistical measures of divergence relative to RE to bound the set of subjective probabilities. This form of misspecification alters econometric identification and inferences in a substantial way, leading us to construct robust confidence sets for various set identified functionals.

  PublisherDOI

• Uncertainty, Social Valuation, and Climate Change

  SSRN Electronic Journal · 2024-01-01 · 2 citations

  articleOpen accessSenior author
  PublisherDOI

Recent grants

• Weathering Uncertainty in the Long Run

  NSF · $201k · 2005–2009

Frequent coauthors

• Thomas J. Sargent

  215 shared

• José Scheinkman

  Columbia University

  97 shared

• Jaroslav Borovička

  New York University

  47 shared

• William A. Brock

  30 shared

• Loïc Berger

  Université de Lille

  24 shared

• Mássimo Marinacci

  22 shared

• Xiaohong Chen

  Hunan Cancer Hospital

  19 shared

• Michael Barnett

  19 shared

Education

• Ph.D., Economics

  University of Chicago

  1982

• M.A., Economics

  University of Chicago

  1979

• B.A., Economics

  University of Minnesota

  1975

Awards & honors

• Nobel Prize in Economic Sciences