Robert Shiller (b. 1946)

Who They Were

Robert Shiller (born 1946) is an American economist known for his empirical study of financial markets and for arguing that asset prices can swing far more than underlying fundamentals justify. A long-time professor at Yale University, he became one of the most prominent voices questioning the efficient-market view that prices always reflect available information rationally. His work drew on behavioural insights to explain booms and busts in stocks and housing, and he is often associated with warnings about speculative bubbles. In 2013 he shared the Sveriges Riksbank Prize in Economic Sciences with Eugene Fama and Lars Peter Hansen for empirical analysis of asset prices — an award notable because Shiller and Fama reached very different conclusions about whether markets price assets efficiently. He has also reached general readers through widely read books on markets and human behaviour.

Key Contributions

Shiller's research documented that asset prices, especially in stock and housing markets, fluctuate more than can be explained by changes in fundamentals such as dividends — evidence he read as challenging the efficient-market hypothesis. With Karl Case he developed the Case-Shiller Home Price Index, now a standard measure of US house prices that helped make housing-market swings visible and analysable. He also popularised the phrase irrational exuberance, which he took as a book title, in his writing on speculative bubbles. With the economist George Akerlof he explored the role of psychology and confidence in driving the wider economy. His 2013 Nobel, shared with Fama and Hansen for empirical analysis of asset prices, placed two incompatible readings of market behaviour on the same platform, reflecting genuine disagreement about whether prices can be predictably wrong.

On EconRecall

American economist known for work on asset-price volatility and housing; shared the 2013 Nobel with Fama and Hansen. Play the games that feature Robert Shiller: