Irrational Exuberance

Irrational Exuberance

by Robert J. Shiller
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Irrational Exuberance by Robert J. Shiller

With a new Afterword on the current state of the stock market, the ongoing debate over the “new economy,” and the larger implications of “irrational exuberance.”

In this controversial, hard-hitting account of today’s explosive market, Robert J. Shiller, a leading expert on market volatility, evokes Alan Greenspan’s infamous 1996 reference, “irrational exuberance,” to explain the alternately soaring and declining stock market. Shiller’s unconventional yet persuasive argument credits an unprecedented confluence of events with driving stocks to uncharted heights, and he analyzes the structural, cultural, and psychological factors behind these levels of growth not reflected in any other sector of the economy. Now more relevant than ever, this analysis is both chilling and convincing—a must-read for the individual investor, the policy maker, and the investment professional.

Product Details

ISBN-13: 9780767907187
Publisher: The Crown Publishing Group
Publication date: 04/10/2001
Pages: 319
Product dimensions: 5.46(w) x 8.19(h) x 0.89(d)

About the Author

Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. He is author of Market Volatility and Macro Markets, which won the 1996 Paul A. Samuelson Award.

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Irrational Exuberance 4.4 out of 5 based on 0 ratings. 7 reviews.
Guest More than 1 year ago
Shortly after a 1996 briefing by author Robert J. Shiller, Alan Greenspan, chairman of the U.S. Federal Reserve Board, warned the country about the mood of 'irrational exuberance' that was pushing up stock prices. In hindsight, it¿s clear that the bull was just beginning. Anyone who heeded that warning would have missed nearly unprecedented gains. But Shiller proved prophetic when the market peaked and crashed in 2000, the year he published this book¿s first edition. Shiller isn¿t teaching market timing he¿s debunking cherished investing axioms, such as the belief that stocks or real estate are necessarily great long-term investments. He discredits financial reporting, notes the psychological and emotional factors that make investors behave irrationally, and sounds a note of caution as timely now as it was at the turn of the millennium. This book vaccinates you against the virus of credulity. We suggest a copy for every investor - dog-eared from frequent rereading. It¿s a wise investment.
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Guest More than 1 year ago
An interesting read even today after part of the unwinding of the market in 2001-2003 1stQ. The recent market recovery has also elements of irrationality to it, applying Mr. Schillers' rules to it is a gratifying exercise. The book underestimates perhaps the importance of easy money being made available by the monetary authorities tilting supply in one direction. Otherwise great insights presented in a clear and easily understandable way
Guest More than 1 year ago
Explaing the stock market in the new economy, Robert Shiller recounts how investors are led to speculate as if in this new era there is no downside. He then presents evidence on how mass psychology and behavior promote the speculative bubble. Shiller also discusses how economists and media commentators rationalize higher market levels based on theories about the efficiency and behavior of the new stock market. Finally, the author presents a sober warning on the implications of speculative behavior of investors, institutions and government. The book ends with a number of suggestions for individuals and institutions to minimize the consequences when the bubble will burst. Some of the interesting, and often amusing, observations in the book include the following: Alan Greenspan adopted the term 'irrational exuberance' after Shiller coined that term in his testimony to the Federal Reserve Board meeting presided by Greenspan in December 1996. Greenspan often poses questions rather than offer solutions because he does not know the answers. The overwhelming majority of investors in the stock market are Baby Boomers who did not experienced the great depression. The dominant size and position of the U.S. economy in the world has created the belief that the U.S. stock market can not crash. The uncritical reporting of the media of the degree of speculation for stocks with huge P/E ratios. The universal use of the internet has created an environment for speculation. In conclusion, it appears that Robert Shiller coined the term, irrational exuberance, as a warning. With this book he may have made a prophesy.