Irrational Exuberance

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Currency/Doubleday, 2005 - Business & Economics - 304 pages
5 Reviews
In this timely and prescient update of his celebrated 2000 bestseller, Robert Shiller returns to the topic that gained him international fame: market volatility. Having predicted the stock market collapse that began just one month after the first edition was published, he now expands the book to cover other markets that have become volatile, particularly the recently red-hot housing market. He includes a full chapter on domestic and international housing prices in historical perspective.

Shiller amasses impressive evidence to support his argument that the recent housing market boom bears many similarities to the stock market bubble of the late 1990s, and may eventually be followed by declining home prices for years to come. After stocks plummeted when the bubble burst in 2000, investors moved their money into housing. This precipitated the inflated real estate prices not only in America but around the world, Shiller maintains. Hence, irrational exuberance did not disappear—it merely reappeared in other settings.

Building on the original edition, Shiller draws out the psychological origins of volatility in financial markets, this time folding real estate into his analysis. He broadens the evidence that investing in capital markets of all kinds in the modern free-market economy is inherently unstable—subject to the profoundly human influences captured in Alan Greenspan’s now-famous phrase, “irrational exuberance.” As was true of its predecessor, the second edition of Irrational Exuberance is destined to be widely read, discussed, and debated.

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LibraryThing Review

User Review  - ohernaes - LibraryThing

Sometimes stresses the long-term picture, but it must be noted that that is still based on trends and patners. Goes through 12 factors. Links Ash, Milgram experiments to learning about authority/majority being right-information. People have inconsistent views. Read full review

LibraryThing Review

User Review  - dmarsh451 - LibraryThing

I couldn't resist a book with a chapter called, 'Naturally Occurring Ponzi Processes'. That has to be my favourite title for anything in the last 10 years. Talk about the what that explains everything ... Read full review

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About the author (2005)

Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. He is the recipient of the 2000 Commonfund Prize, awarded for Best Contribution to Endowment Management Research, for Irrational Exuberance. He is also the author of Market Volatility and Macro Markets, which won the 1996 Paul A. Samuelson Award.

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