Robert J. Shiller > Quotes

“It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble.”
― Robert Shiller

“The ability to focus attnetion on important things is a defining characteristic of intelligence."---Irrational Exuberance”
― Robert J. Shiller

“Irrational exuberance is the psychological basis of a speculative bubble. I define a speculative bubble as a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increases and bringing in a larger and larger class of investors, who, despite doubts about the real value of an investment, are drawn to it partly through envy of others’ successes and partly through a gambler's excitement.”
― Robert J. Shiller, Irrational Exuberance

“How errors of human judgment can infect even the smartest people, thanks to overconfidence, lack of attention to details, and excessive trust in the judgments of others, stemming from a failure to understand that others are not making independent judgments but are themselves following still others—the blind leading the blind.”
― Robert J. Shiller, Irrational Exuberance

“In the future, we will surely have even bigger such bubbles, each built up around its new and different new era story, and we will have to invent new names for them.”
― Robert J. Shiller, Irrational Exuberance

“Just what is a speculative bubble? The Oxford English Dictionary defines a bubble as “anything fragile, unsubstantial, empty, or worthless; a deceptive show. From 17th c. onwards often applied to delusive commercial or financial schemes.” The problem is that words like show and scheme suggest a deliberate creation, rather than a widespread social phenomenon that is not directed by any central impresario.”
― Robert J. Shiller, Irrational Exuberance

“If we exaggerate the present and future value of the stock market, then as a society we may invest too much in business start-ups and expansions, and too little in infrastructure, education, and other forms of human capital.”
― Robert J. Shiller, Irrational Exuberance

“The word bubble creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles are not so easily ended; indeed, they may deflate somewhat, as the story changes, and then reflate.”
― Robert J. Shiller, Irrational Exuberance

“I also hope to challenge financial thinkers to improve their theories by testing them against the impressive evidence that suggests that the price level is more than merely the sum of the available economic information, as is now generally thought to be the case.”
― Robert J. Shiller, Irrational Exuberance

“Is the market high only because of some irrational exuberance — wishful thinking on the part of investors that blinds us to the truth of our situation?”
― Robert J. Shiller, Irrational Exuberance

“Certainly some researchers are thinking more realistically about the market’s prospects and reaching better-informed positions on its future, but these are not the names that grab the headlines and thus influence public attitudes.”
― Robert J. Shiller, Irrational Exuberance

“In a broad sense, this book, from its first edition in 2000, has been about trying to understand the change in thinking of the people whose actions ultimately drive the markets. It is about the psychology of speculation, about the feedback mechanism that intensifies this psychology, about herd behavior that can spread through millions or even billions of people, and about the implications of such behavior for the economy and for our lives. Although the book originally focused directly on current economic events, it was, and is, about how errors of human judgment can infect even the smartest people, thanks to overconfidence, lack of attention to details, and excessive trust in the judgments of others, stemming from a failure to understand that others are not making independent judgments but are themselves following still others—the blind leading the blind.”
― Robert J. Shiller, Irrational Exuberance: Revised and Expanded Third Edition

“narratives are major vectors of rapid change in culture, in zeitgeist, and in economic behavior.”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“In the end, for all of us who strive to achieve, whether in business or in other walks of life, the end of life is a disappointment. The personal pleasure over a lifetime was mostly in the striving and in one’s friendships and interactions. The pinnacle of achievement does not bring happiness, but at best the reflection that the striving achieved some benefit for others, unappreciative and unrelated though those others may”
― Robert J. Shiller, Finance and the Good Society

“People who thought there was a bubble, and that prices were too high, find themselves questioning their own earlier judgments, and start to wonder whether fundamentals are indeed driving the price increase.”
― Robert J. Shiller, Irrational Exuberance: Revised and Expanded Third Edition

“We need to incorporate the contagion of narratives into economic theory. Otherwise, we remain blind to a very real, very palpable, very important mechanism for economic change, as well as a crucial element for economic forecasting. If we do not understand the epidemics of popular narratives, we do not fully understand changes in the economy and in economic behavior.”
― Robert J Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“the business of statesmanship is to invent new terms for institutions which under their old names have become odious to the public.”
― Robert J Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“Trying to understand major economic events by looking only at data on changes in economic aggregates, such as gross domestic product, wage rates, interest rates, and tax rates, runs the risk of missing the underlying motivations for change. Doing so is like trying to understand a religious awakening by looking at the cost of printing religious tracts.”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.23”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“... confidence, fairness, corruption, money illusion, and stories. These are real motivations for real people. They are ubiquitous. The presumption of mainstream macroeconomics that they have no important role strikes us as absurd.”
― Robert Shiller

“Consider finding a mate, someone to live with in a close relationship, usually as husband and wife. It is indeed a sort of market problem, in that the issue is not just finding a satisfactory person but also finding someone, confronted with the same search problem, who is willing to consider you as his or her best choice. Finding a match between husband and wife is like finding a trade in a financial market. It entails learning a market price (in the marriage market it is one’s attractiveness to certain kinds of potential spouses) and finding the best deal at that price. This analogy is not meant to put a commercial slant on a very personal problem, but instead to start us thinking about how we can design a better solution to the problem.”
― Robert J. Shiller, Finance and the Good Society

“It has been difficult for scholars to research popular narratives, focusing on the core elements that make them contagious, without being accused of taking sides in political, or sometimes religious, controversies.”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“The lesson is that history, including economic history, is not the logically ordered sequence of events that is presented by subsequent narratives that try to make sense of it or try to achieve public consensus. Major things happen because of seemingly irrelevant mutations in narratives that have slightly higher contagion rates, slightly lower forgetting rates, or first-mover effects that give one set of competing narratives a head start. These random events can feed back into bigger and more pervasive narrative constellations,”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“Yet some basic tendency toward overconfidence appears to be a robust human character trait: the bias is definitely toward over-confidence rather than underconfidence.”
― Robert J. Shiller, Irrational Exuberance: Revised and Expanded Third Edition

“We can say with some accuracy that most people put on a show of their own knowledgeability and try to conceal their ignorance of millions of facts.”
― Robert Shiller

“Google Hangouts,”
― Robert J. Shiller, Irrational Exuberance: Revised and Expanded Third Edition

“The American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement … It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events

“People have realised that, in light of historical statistics, they have been too fearful of stocks. Armed with this new knowledge, investors have now bid stock prices up to a higher level.”
― Robert J. Shiller, Irrational Exuberance

“The key to achieving our goals and enhancing human values is to maintain and continually improve a democratic financial system that takes account of the diversity of human motives and drives. We need a system that allows people to make complex and incentivizing deals to further their goals, and one that allows an outlet for our aggressions and lust for power. It must be a system that redirects the inevitable human conflicts into a manageable arena, an arena that is both peaceful and constructive.”
― Robert J. Shiller, Finance and the Good Society

“The federal government operates pretty much in line with the quip, “If it moves, tax it; if you can’t tax it, control it; if you can’t control it, give it a million dollars.”
― Robert J. Shiller, Narrative Economics: How Stories Go Viral and Drive Major Economic Events