Gene Fama’s Career in Finance

Gene Fama February 15th, 2010

This post makes available an autobiographical note by Gene Fama that was commissioned by the Annual Review of Financial Economics. Gene’s remarkable career and vision, to say nothing of his engaging writing style, make this short piece a must read for anyone interested in finance. However, as his colleagues, we believe his modesty led him to omit three crucial aspects of his contributions.

First, Gene was (and still is) essential to shaping the nature of the finance group at Chicago. As he explains in a somewhat understated fashion, he and Merton Miller transformed the finance group turning it into a research oriented unit. For the last 47 years he has held court on Tuesday afternoons in the finance workshop, in a room that now bears his name. Through the workshop, generations of students, colleagues, and visitors have been and continue to be exposed to his research style of developing and rigorously testing theories with real world data that has become the hallmark of Chicago finance.

Second, and equally important, is his leadership. 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. He has promoted a contest of ideas and outlooks, all subject to his exceptional standards of quality. The makeup of the group has shifted as the world and what we know about it has changed. 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.

Finally, each of us has our own personal examples of Gene’s generosity, kindness and mentorship.   He is an impeccable role model. He is in his office every day, and his door is always open. By personal example, he sets the standards for the values and ethics by which we do research and run our school. All of us have learned enormously from Gene’s generous willingness to discuss his and our work, and gently and patiently to explain and debate that work with generations of faculty.  Gene likely enjoys as high a ranking in the “thanks for comments” footnotes of published papers as he does in citations.  He has made the finance group an exciting, collegial, and welcoming place to work. He has greatly enhanced all of our research careers and accomplishments. He is a great friend, and we can only begin to express our gratitude.

We hope you enjoy reading Gene’s description of his career that might just as well be described as the story of how modern finance evolved at Chicago.

Gene’s Tenured Finance Faculty Colleagues at Chicago Booth

John H. Cochrane, George M. Constantinides, Douglas W. Diamond, Milton Harris, John C. Heaton, Steven Neil Kaplan, Anil K Kashyap, Richard Leftwich, Tobias J. Moskowitz, Lubos Pastor, Raghuram G. Rajan, Richard Thaler, Pietro Veronesi, Robert W. Vishny, and Luigi Zingales

Read note>

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