Examples of Work by Robert J. Shiller

Robert J. Shiller

Robert J. Shiller is Professor of Economics at Yale University. He completed his B.A. from the University of Michigan in 1967 and his Ph.D. in economics from the Massachusetts Institute of Technology in 1972. The most renowned work of Robert J. Shiller is Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It, Irrational Exuberance, Finance and the Good Society, Macro Markets: Creating Institutions for Managing Society's largest Economic Risks.

Articles

Animal spirits depend on trust
The sickness beneath the slump Spend, spend, spend. It's the American way
Democratize wall street, for social good
Debt and Delusion

Research Papers

Download: Historic turning points in real estate
This paper looks for markers of ends of real estate booms or busts. The changes in market psychology and related indicators that occurred at real estate market turning points in the United States since the 1980s are compared with changes at turning points in the more distant past. In all these episodes changes in an atmosphere of optimism about the future course of home prices, changes in public interpretation of the boom, as well as evidence of supply response to the high prices of a boom, are noted..

Download: Is there a bubble in the housing market?
The term 'bubble' is widely used but rarely clearly defined. We believe that in its widespread use the term refers to a situation in which excessive public expectations of future price increases cause prices to be temporarily elevated. During a housing price bubble, homebuyers think that a home that they would normally consider too expensive for them is now an acceptable purchase because they will be compensated by signifi- cant further price increases. They will not need to save as much as they otherwise might, because they expect the increased value of their home to do the saving for them. First-time homebuyers may also worry during a housing bubble that if they do not buy now, they will not be able to afford a home later. Furthermore, the expectation of large price increases may have a strong impact on demand if people think that home prices are very unlikely to fall, and certainly not likely to fall for long, so that there is lit- tle perceived risk associated with an investment in a home.

Download: Speculative behavior of institutional investors
A survey compared speculative behavior in two groups of institutional investors. The 'experimental' group held stocks that had shown extraordinary price increases over the preceding year that also had high price earnings ratios. The control group held randomly selected stocks. In Shiller and Pound [1986] we argued that the survey results gave some support to some diffusion or epidemic models for interest in the stocks in the experimental group. Here, we show that the two groups are similar in describing their investment strategy as relating to a theory about fundamental value rather than about the kind of stocks that are becoming attractive to investors. However, the experimental group is less likely to make explicit comparisons of price with measures of fundamental value, and differs from the control group in their attitudes toward timing, price changes, and short-term earnings disappointment. Overall, these results appear consistent with the notion that price changes unrelated to fundamentals may be caused by contagious enthusiasm about fundamentals amongst institutional investors.

Download: Understanding recent trends in house prices and home ownership
This paper looks at a broad array of evidence concerning the recent boom in home prices, and considers what this means for future home prices and the economy. It does not appear possible to explain the boom in terms of fundamentals such as rents or construction costs. A psychological theory, that represents the boom as taking place because of a feedback mechanism or social epidemic that encourages a view of housing as an important investment opportunity, fits the evidence better. Three case studies of past booms are considered for comparison: the US housing boom of 1950, the US farmland boom of the 1970s, and the temporary interruption 2004-5 of the UK housing boom.

Videos

Double dip in the U.S. is a possibility
An Interview with Robert J. Shiller Part 1
An Interview with Robert J. Shiller Part 2

Series

Irrational Exuberance

Podcast

The subprime solution: How today's global financial crisis happened, and what do about it

His most recent publications includes :

Finance and the good society look inside : Finance and the good society
The subprime solution: How today's global financial crisis happened, and what to do about it look inside : The subprime solution: How today's global financial crisis happened, and what to do about it
The new financial order: Risk in the 21st century look inside : The new financial order: Risk in the 21st century
Too big to save: How to fix the U.S. financial system look inside : Too big to save: How to fix the U.S. financial system