In 'Irrational Exuberance,' Robert J. Shiller uncovers the volatile dynamics of financial markets and the psychological factors that drive investor behavior. He argues that emotional reactions often lead to market bubbles and crashes, challenging the conventional belief in rational market efficiency. Shiller's insightful analysis spans historical market trends, revealing how collective psychology can distort perceptions of value. With compelling evidence and engaging narratives, he prompts readers to rethink their understanding of risk and speculation. This groundbreaking work raises critical questions about the sustainability of economic growth and the true nature of investment decision-making.
By Robert J. Shiller
Published: 2016
"The stock market is driven by emotions and social dynamics, often leading to exuberant bubbles that defy logic."
Why the irrational exuberance of investors hasn't disappeared since the financial crisis 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, cautions that signs of irrational exuberance among investors have only increased since the 2008–9 financial crisis. With high stock and bond prices and the rising cost of housing, 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. Previous editions covered the stock and housing markets—and famously predicted their crashes. This edition expands its coverage to include the bond market, so that the book now addresses all of the major investment markets. It also includes updated data throughout, as well as Shiller's 2013 Nobel Prize lecture, which places 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 this book.
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“The stock market is driven by emotions and social dynamics, often leading to exuberant bubbles that defy logic.”
Irrational Exuberance
By Robert J. Shiller
Discover a world of knowledge through our extensive collection of book summaries.
Robert J. Shiller is a prominent American economist, best known for his analysis of financial markets and behavioral economics. He is a Sterling Professor of Economics at Yale University and a co-founder of the Case-Shiller index, which tracks U.S. home prices. Shiller gained international acclaim with his books, including 'Irrational Exuberance', which critiques the volatility of stock and real estate markets, and 'Animal Spirits', co-authored with George Akerlof, which explores the psychological factors affecting economic decision-making. His writing is characterized by its accessibility, blending rigorous economic theory with practical insights, engaging a broad audience and influencing both academic discourse and public policy.
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