Robert J. Shiller, Co-Winner of the 2013 Nobel Prize in Economics
A New York Times Bestseller
Winner of the 2000 Commonfund Prize for the Best Contribution to Endowment Management Research
Hardcover | 2015 |
$29.95 | ($20.97) / £19.95 | (£13.97) | ISBN: 9780691166261
392 pp. | 6 x 9 | 13 line illus.
In this revised, updated, and expanded edition of his New York Times bestseller, Nobel Prize–winning economist Robert Shiller, who warned of both the tech and housing bubbles, now cautions that signs of irrational exuberance among investors have only increased since the 2008–9 financial crisis. With high stock and bond prices in the United States, and rising housing prices in many countries, the post-subprime boom may well turn out to be another illustration of Shiller’s influential argument that psychologically driven volatility is an inherent characteristic of all asset markets. In other words, Irrational Exuberance is as relevant as ever.
But Irrational Exuberance is about something far more important than the current situation in any given market because the book explains the forces that move all markets up and down. It shows how investor euphoria can drive asset prices up to dizzying and unsustainable heights, and how, at other times, investor discouragement can push prices down to very low levels.
Previous editions covered the stock and housing markets—and famously predicted their crashes. This new edition expands its coverage to include the bond market, so that the book now addresses all of the major investment markets. This edition also includes updated data throughout, as well as Shiller’s 2013 Nobel Prize lecture, which puts the book in broader context.
In addition to diagnosing the causes of asset bubbles, Irrational Exuberance recommends urgent policy changes to lessen their likelihood and severity—and suggests ways that individuals can decrease their risk before the next bubble bursts. No one whose future depends on a retirement account, a house, or other investments can afford not to read it.
For more information, including new developments and regular data updates, please go to www.irrationalexuberance.com
Robert J. Shiller, the recipient of the 2013 Nobel Prize in economics, is a best-selling author, a regular contributor to the Economic View column of the New York Times, and a professor of economics at Yale University. His books include Finance and the Good Society, Animal Spirits (cowritten with George A. Akerlof), The Subprime Solution, and The New Financial Order (all Princeton). He lives in New Haven, Connecticut.
"[Shiller] fully updates his argument here, adding new material (a chapter on the bond market, his 2013 Nobel lecture) and augmenting the text to reflect developments since the 2005 second edition. He vacuums up all manner of cultural phenomena, from the important (rising income inequality) to the possibly significant (Google Glass) to the trivial (Kim Kardashian), to reinforce his thesis, and he writes expressively, whether explaining arcane economic issues or illustrating how the story behind Mona Lisa’s smile helps account for the painting's astonishing market value. A rare example of economic analysis, deeply respected within the discipline, wholly accessible to general readers."--Kirkus
"A superb, well-written, well-argued contribution for serious scholars and practitioners, whether they agree with Shiller or not."--Choice
TABLE OF CONTENTS:
List of Figures and Tables ix
Preface to the Third Edition xi
Preface to the Second Edition, 2005 xix
Preface to the First Edition, 2000 xxv
1 The Stock Market in Historical Perspective 1
2 The Bond Market in Historical Perspective 11
3 The Real Estate Market in Historical Perspective 18
Part 1 Structural Factors
4 Precipitating Factors: The Internet, the Capitalist Explosion, and Other Events 39
5 Amplification Mechanisms: Naturally Occurring Ponzi Processes 70
Part 2 Cultural Factors
6 The News Media 101
7 New Era Economic Thinking 123
8 New Eras and Bubbles around the World 150
Part 3 Psychological Factors
9 Psychological Anchors for the Market 165
10 Herd Behavior and Epidemics 175
Part 4 Attempts to Rationalize Exuberance
11 Efficient Markets, Random Walks, and Bubbles 195
12 Investor Learning--and Unlearning 214
Part 5 A Call to Action
13 Speculative Volatility in a Free Society 225
Appendix Nobel Prize Lecture: Speculative Asset Prices 239