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Robert J. Shiller
Published: 2005
Irrational Exuberance is a book by economist Robert J. Shiller that explores the psychological and sociological factors that drive asset price bubbles and the potential consequences of such bubbles. The book begins by discussing the concept of irrational exuberance, or a collective belief that an asset's price will continue to rise even though there may be little fundamental justification for such a rise. Shiller argues that this irrational exuberance is a key driver of asset price bubbles, and he cites numerous historical examples of such bubbles, including the tulip mania of the seventeenth century and the real estate bubble of the 1980s.
The book then goes on to examine the stock market bubble of the late 1990s in detail, analyzing the factors that contributed to the bubble and the consequences of its eventual burst. Shiller argues that the stock market bubble was fueled by a combination of technological optimism, low interest rates, and the proliferation of individual investors, and he discusses the impact of the bubble's burst on the broader economy.
Throughout the book, Shiller offers suggestions for how to mitigate the risks of asset price bubbles, including increasing transparency in financial markets, promoting better investor education, and allowing for more countercyclical monetary policy. He also discusses the role of policy makers and regulators in preventing and managing such bubbles.
In the final chapter of the book, Shiller looks to the future, speculating on the potential for future asset price bubbles and the steps that can be taken to avoid them. He concludes by stating that while asset price bubbles may be an inherent part of human nature, they can be managed and controlled through careful planning and sound policy making.
The book then goes on to examine the stock market bubble of the late 1990s in detail, analyzing the factors that contributed to the bubble and the consequences of its eventual burst. Shiller argues that the stock market bubble was fueled by a combination of technological optimism, low interest rates, and the proliferation of individual investors, and he discusses the impact of the bubble's burst on the broader economy.
Throughout the book, Shiller offers suggestions for how to mitigate the risks of asset price bubbles, including increasing transparency in financial markets, promoting better investor education, and allowing for more countercyclical monetary policy. He also discusses the role of policy makers and regulators in preventing and managing such bubbles.
In the final chapter of the book, Shiller looks to the future, speculating on the potential for future asset price bubbles and the steps that can be taken to avoid them. He concludes by stating that while asset price bubbles may be an inherent part of human nature, they can be managed and controlled through careful planning and sound policy making.
1. Asset price bubbles are driven by irrational exuberance, or a collective belief that an asset's price will continue to rise even though there may be little fundamental justification for such a rise.
2. Asset price bubbles have the potential to cause financial crises and economic downturns, and their effects can be far-reaching, affecting not just those who directly hold the assets in question but the broader economy as well.
3. There are steps that can be taken to mitigate the risks of asset price bubbles, including increasing transparency in financial markets, promoting better investor education, and allowing for more countercyclical monetary policy.
4. Policy makers and regulators have a role to play in preventing and managing asset price bubbles.
5. While asset price bubbles may be an inherent part of human nature, they can be managed and controlled through careful planning and sound policy making.
2. Asset price bubbles have the potential to cause financial crises and economic downturns, and their effects can be far-reaching, affecting not just those who directly hold the assets in question but the broader economy as well.
3. There are steps that can be taken to mitigate the risks of asset price bubbles, including increasing transparency in financial markets, promoting better investor education, and allowing for more countercyclical monetary policy.
4. Policy makers and regulators have a role to play in preventing and managing asset price bubbles.
5. While asset price bubbles may be an inherent part of human nature, they can be managed and controlled through careful planning and sound policy making.
Irrational Exuberance is a comprehensive and thought-provoking book that delves into the underlying causes of asset price bubbles and the role of psychological and sociological factors in driving them. Written by economist Robert J. Shiller, the book was first published in 2000, at the height of the stock market bubble of the late 1990s.
In the book, Shiller argues that asset price bubbles are driven by irrational exuberance, or a collective belief that an asset's price will continue to rise even though there may be little fundamental justification for such a rise. He cites numerous historical examples of asset price bubbles, such as the tulip mania of the seventeenth century and the real estate bubble of the 1980s, and uses these examples to demonstrate the pervasiveness and destructive power of such bubbles.
Shiller also discusses the potential consequences of asset price bubbles, including financial crises and economic downturns. He argues that these bubbles can have far-reaching effects, not just on those who directly hold the assets in question, but on the broader economy as well.
Throughout the book, Shiller offers suggestions for how to mitigate the risks of asset price bubbles, such as increasing transparency in financial markets and promoting better investor education. He also suggests that policy makers and regulators have a role to play in preventing and managing such bubbles.
Overall, Irrational Exuberance is a valuable resource for anyone interested in understanding the complex and often irrational forces that drive asset price bubbles and the potential consequences of such bubbles.
In the book, Shiller argues that asset price bubbles are driven by irrational exuberance, or a collective belief that an asset's price will continue to rise even though there may be little fundamental justification for such a rise. He cites numerous historical examples of asset price bubbles, such as the tulip mania of the seventeenth century and the real estate bubble of the 1980s, and uses these examples to demonstrate the pervasiveness and destructive power of such bubbles.
Shiller also discusses the potential consequences of asset price bubbles, including financial crises and economic downturns. He argues that these bubbles can have far-reaching effects, not just on those who directly hold the assets in question, but on the broader economy as well.
Throughout the book, Shiller offers suggestions for how to mitigate the risks of asset price bubbles, such as increasing transparency in financial markets and promoting better investor education. He also suggests that policy makers and regulators have a role to play in preventing and managing such bubbles.
Overall, Irrational Exuberance is a valuable resource for anyone interested in understanding the complex and often irrational forces that drive asset price bubbles and the potential consequences of such bubbles.
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A thought-provoking analysis of market behavior and the dangers of herd mentality
Published 1 year ago by wsrl-bot
Irrational Exuberance is a comprehensive and thought-provoking book that delves into the underlying causes of asset price bubbles and the role of psychological and sociological factors in driving them. Written by economist Robert J. Shiller, the book was first published in 2000, at the height of the stock market bubble of the late 1990s. In...
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