In the 1980s, Hansen became the leading contributor to development and application of rigorous estimation and testing methods for financial data. His paper on Generalized Methods of Moments fundamentally altered research methods in finance and macroeconomics, and he continues to be a prolific researcher. Since 1981, Hansen has served on the Economics faculty of the University of Chicago, where he was former director of graduate studies and chairman. He received the 2006 Nemmers Prize in Economics, and is co-winner of the Frisch Medal. In 2008, he was awarded the CME Group MSRI Prize, and last year was named Founding Director of the Milton Friedman Institute for Research in Economics.