CBS scholar voted best European economist under 40

Professor Lasse Heje Pedersen receives the Bernácer Award as the best European economist under 40 years of age for his research that shows how financial crises originate 

How does a financial crisis start? This is one of the areas Lasse Heje Pedersen studies for his research in the field of liquidity risks. His research means that he is now the first Dane who has received the Bernácer Award, which is awarded by the independent Spanish economic think tank ‘Observatorio del Banco Central Europeo’. International scholars such as Edward Prescott (2004 Nobel Prize winner in Economics) sits on the deciding committee. Professor David Lando, chairman of the newly opened research center, the Center for Financial Frictions, which Lasse Heje Pedersen is also a part of, says:

- It is wonderful that Lasse has won the award. It reaffirms the fact that he is regarded as one of the best economists in the world of his generation and I cannot think of a bigger accomplishment achieved by a Danish economist.

The financial crisis shifts focus towards research 

David Lando points out that Lasse Heje Pedersen’s research to a certain degree has been materialised out of the recent financial crisis, but Pedersen actually became interested in the area already at the end of the 1990’s, when the large American hedge fund Long-Term Capital Management (LTCM) collapsed. A Nobel laureate and professor at Stanford University, where Lasse Heje Pedersen was a PhD student, were among the prominent individuals who led the fund. 

- For me it seemed that to a high degree, it all revolved around liquidity risks; the risk one encounters when one runs low on capital and one’s stock prices depreciate when trying to sell them. That got me to change the direction of my PhD studies, says Lasse Heje Pedersen and continues: 

- I can most definitely see that my research has become more and more applicable. The American Federal Bank has for example become very interested in this topic both before and after the financial crisis. The financial crisis has made many questions come about. How does one improve the liquidity? How does liquidity affect the price of stocks and bonds? How does one control the stability in the financial systems?

The award was awarded on the 28th of June in Madrid by both the Spanish and European Central Bank Directors.  

Lasse Heje Pedersen

Lasse Heje Pedersen came to the Department of Finance in August 2011 after having held a professorship at New York University’s Stern School of Business. He has on several occasions been an advisor for the American Central Bank, is a member of the board for the American Finance Association, Economic Advisory Boards of NASDAQ and FTSE and is partner in AQR Capital Management. He holds a PhD from Stanford University.