Robert J. Shiller

Shiller received a bachelor’s degree in economics from the University of Michigan, Ann Arbor (1967), and master’s (1968) and doctoral (1972) degrees in economics from the Massachusetts Institute of Technology (MIT). He taught at the University of Minnesota, the University of Pennsylvania, and MIT before joining (1982) the economics faculty of Yale University, where he subsequently held endowed chairs in economics and a professorship in finance. From 1979 he served as a research associate with the National Bureau of Economic Research, a private nonprofit organization that determines the official beginning and ending dates of recessions and economic expansions in the United States.

Shiller’s studies of cases of widespread overvaluation by investors, what he termed “irrational exuberance,” contradicted the once dominant assumption that markets are inherently rational (a view developed by Fama in the 1960s and early ’70s) and led him to argue that financial markets are subject to “bubbles,” or rapid increases in asset prices to unsustainable levels. Shiller correctly predicted the “bursting” of such bubbles in information-technology stocks in 2000 and in real estate beginning in 2006 (see financial crisis of 2007–08). From the 1980s Shiller was a pioneer in the emerging field of behavioral economics, which sought to apply the insights of psychology and other social sciences to the study of economic behaviour. He was also the cocreator, with Karl E. Case, of the S&P/Case-Shiller Home Price Index, which tracks changes in the average price of residential real estate in several major U.S. cities.

Shiller’s major publications included Market Volatility (1989), Irrational Exuberance (2000), Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism (2009; written with George A. Akerlof), Finance and the Good Society (2012), and Narrative Economics: How Stories Go Viral and Drive Major Economic Events (2019).