Robert J. Shiller facts for kids
{{Infobox economist | name = Robert J. Shiller | school_tradition = New Keynesian economics
Behavioral economics | image = Robert J. Shiller 2017.jpg | image_size = | caption = Shiller in July 2017 | birth_name = Robert James Shiller | birth_date = March 29, 1946 | birth_place = Detroit, Michigan, U.S. | death_date = | death_place = | institution = Yale University | field = Financial economics
Behavioral finance | alma_mater =Kalamazoo College
University of Michigan (BA)
Massachusetts Institute of Technology (PhD) | doctoral_advisor = Franco Modigliani | academic_advisors = | doctoral_students = John Y. Campbell | notable_students = | influences = John Maynard Keynes
George Akerlof<|thumb|240px|Nobel Prize Laureate Robert J. Shiller during press conference in Stockholm, December 2013]]
Robert James Shiller (born March 29, 1946) is an American economist, a university professor, and an author. He teaches Economics at Yale University. He is also a research expert at the National Bureau of Economic Research (NBER).
Shiller is well-known for warning about financial "bubbles." These are times when prices for things like stocks or houses go up very quickly and unsustainably. He predicted problems in the housing market before the big financial crisis of 2008.
In 2013, Robert Shiller won the Nobel Memorial Prize in Economic Sciences. He shared this important award with two other economists, Eugene Fama and Lars Peter Hansen. They won for their work on understanding how asset prices (like stocks and bonds) change over time.
Contents
Early Life and Education
Robert Shiller was born in Detroit, Michigan, in 1946. His father was an engineer. Robert went to Kalamazoo College for two years. Then, he transferred to the University of Michigan, where he earned his first degree in 1967.
He continued his studies at the Massachusetts Institute of Technology (MIT). He received his master's degree in 1968 and his PhD in 1972. His PhD work was about how people's expectations affect interest rates.
Career and Important Ideas
Shiller has been a professor at Yale University since 1982. He has also taught at other universities. His work focuses on many economic topics, including how people's behavior affects financial markets. This field is called behavioral finance.
Challenging Market Ideas
In 1981, Shiller wrote an important article. It questioned the idea that financial markets are always "efficient." The efficient-market hypothesis said that stock prices always reflect all available information perfectly.
Shiller looked at the U.S. stock market since the 1920s. He found that stock prices changed much more than they should if investors were only making rational decisions. He believed that emotions and other human behaviors played a big role in how markets move.
After the stock market crash in October 1987, more people started to believe in behavioral finance. Shiller's research showed that investors often make decisions based on feelings, not just cold, hard math.
The Case-Shiller Index
In 1991, Shiller helped create a company called Case Shiller Weiss. They studied home prices across the country. They developed a special way to track how house prices change over time. This method became known as the Case-Shiller index.
The Case-Shiller index is now a very famous tool. It helps people understand trends in the housing market. It was created because Shiller and his colleague, Karl Case, noticed unusual booms in house prices.
Warning About Bubbles
Shiller wrote a famous book called Irrational Exuberance in 2000. In this book, he warned that the stock market was in a "bubble." A bubble happens when prices go way too high, much more than their real value. He predicted that this bubble could burst, leading to a big drop in prices. This warning came right before the stock market did indeed fall sharply.
In 2005, he warned again, this time about both the stock market and the housing market. He said that if prices kept rising, it could lead to big drops later. He even suggested it could cause a worldwide recession. His predictions about the housing market collapse came true in the years that followed.
Nobel Prize and Market Efficiency
In 2013, Shiller won the Nobel Prize in Economics. During his Nobel lecture, he explained why markets are not always as efficient as some people think. He argued that market movements are often very unpredictable.
Shiller used an idea from economist John Maynard Keynes to explain this. Keynes compared the stock market to a "beauty contest." In this contest, people don't pick who they find most beautiful. Instead, they try to guess who everyone else will find most beautiful. Shiller believes people in the stock market often do something similar. They don't always use complex math. Instead, they try to guess what other people will do.
He believes that having more information about markets is important. This is why he helped create the Case-Shiller index. It gives people more data about home prices. He thinks modern technology can help economists gather even more data. This could make markets more informed and prices more accurate.
Recent Warnings
In 2017, Shiller said that Bitcoin was the biggest financial bubble at that time. He compared it to a historical event where a new type of money failed.
In 2019, he published another book called Narrative Economics. This book talks about how stories and ideas spread and can influence big economic events.
Works
Books
- Narrative Economics: How Stories Go Viral and Drive Major Economic Events, Robert J. Shiller, Princeton University Press (2019).
- Phishing for Phools: The Economics of Manipulation and Deception, George A. Akerlof and Robert J. Shiller, Princeton University Press (2015).
- Finance and the Good Society, Robert J. Shiller, Princeton University Press (2012).
- Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, George A. Akerlof and Robert J. Shiller, Princeton University Press (2009).
- The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It, Robert J. Shiller, Princeton University Press (2008).
- The New Financial Order: Risk in the 21st Century, Robert J. Shiller, Princeton University Press (2003).
- Irrational Exuberance, Robert J Shiller, Princeton University Press (2000).
- Macro Markets: Creating Institutions for Managing Society's largest Economic Risks, Robert J. Shiller, Clarendon Press, New York: Oxford University Press (1993).
- Market Volatility, Robert J. Shiller, MIT Press (1990).
Images for kids
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This graph from Robert Shiller's book shows how stock prices, earnings, and dividends changed over many years.
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This graph shows that if you invested when stock prices were low compared to earnings, you generally did well over 20 years.
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See also
In Spanish: Robert J. Shiller para niños
- 2008–09 Keynesian resurgence
- House price index
- Journal of Behavioral Finance
