Exuberancia Irracional. Front Cover. Robert J. Shiller Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. Also the author of the. “Irrational exuberance” is the phrase used by the then-Federal Reserve Board chairman, Alan Shiller used it as the title of his book, Irrational Exuberance, in Shiller is associated with the CAPE ratio and the Case-Shiller Home Price . Irrational Exuberance is a March book written by American economist Robert J. Shiller, a Yale University professor and Nobel Prize winner. The book.

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The phrase was interpreted as exuberanccia warning that the market might be overvalued. Greenspan’s comment was made during a televised speech on December 5, emphasis added in excerpt:.

Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?

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Markets around the world followed. Greenspan’s comment was well remembered, although few heeded the warning. The phrase was also used by Yale professor Robert Shillerwho was reportedly Greenspan’s source for the phrase.

He is frequently asked during interviews whether markets are irrationally exuberant as asset prices rise. There was some speculation for many years whether Greenspan borrowed the phrase from Shiller without attribution, although Shiller later wrote that he contributed “irrational” at a lunch with Greenspan before the speech but “exuberant” was a previous [1] Itracional term and it was Greenspan who coined the phrase and not a speech writer.


Greenspan wrote in his book that the phrase occurred to him in the irracionla while he was writing a speech.

The irony of the phrase and its aftermath lies in Greenspan’s widely held reputation as igracional most artful practitioner of Fedspeakoften known as Greenspeakin the modern televised era. The speech coincided with the rise of dedicated financial TV channels around the world that would broadcast his comments live, such as CNBC.

Robert J Shiller

Greenspan’s idea was to obfuscate the Fed Chairman’s true opinion in long complex sentences with obscure words so as to intentionally mute any strong market response.

The further irony was that if it was indeed his intended purpose to “talk markets down” he was later ignored as stock valuations three years later dwarfed the levels at the time of the speech.

This phrase is arguably the most famous example of Greenspeak, albeit perhaps an atypical one. It had become a catchphrase of the boom to such an extent that, during the economic recession that followed the stock market collapse ofbumper stickers reading “I want to be irrationally exuberant again” were sighted in Silicon Valley and elsewhere.

By the mid-to-late s the dot-com losses were recouped and eclipsed by a combination of events, including the s exubfrancia boom and the United States housing bubble. However, the recession of onward wiped out these gains.

Irrational exuberance

The second market slump brought the phrase back into the public eye, where it was much used in hindsightto characterize the excesses of the bygone era. The term gained new currency after the collapse of the US housing market in that led to a worldwide irracionl panic.

Shiller was the co-creator of the Case-Shiller index that tracks US residential housing prices. He is frequently interviewed as an expert on home prices and shared the Nobel prize in economics in for his work on asset prices. Greenspan’s speech and Shiller’s book are often viewed as harbingers of future frenzy whether or not they specifically predicted the bubbles and subsequent crashes that followed.


This combination of events caused the phrase at present to be most irtacional associated with the s dot-com bubble and the s US housing bubble although it can be linked to any financial asset bubble or social frenzy phenomena, such sniller the tulip mania of 17th century Holland.

The phrase is often cited in conjunction with criticism of Irraciona, policies and debate whether he did enough to contain the two major bubbles of those two decades. It is also used in arguments about whether capitalist free markets are rational. Shillercalled Bitcoin the best current example of a speculative bubble. Author Dan Pink also used the phrase in in irraciinal book ” Drive: The Surprising Truth About What Motivates Us ” in the chapter discussing how extrinsic motivation can encourage short-term thinking at the cost of long-term health: What seems to be irrational exuberance is ultimately a bad case of extrinsically motivated myopia”.

From Wikipedia, the free encyclopedia.

Irrational exuberance – Wikipedia

For the book, see Irrational Exuberance book. Retrieved irracionaal August Retrieved 4 September The Age of Turbulence. Fedspeak as a Second Language”.

Retrieved 5 September Irrational Exuberance or Rational Error? Retrieved 7 December Retrieved from ” https: Views Read Edit View history. This page was last edited on 21 Decemberat By using this site, you agree to the Terms of Use and Privacy Policy.

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