Is Shiller saying markets are always irrational?
Not at all. I argue that markets are *often* subject to irrational exuberance and panic, driven by human psychology and the spread of narratives. This doesn't mean they are *always* irrational, nor that rational investors cannot exist. However, it does mean that market prices can deviate significantly from fundamental values for extended periods. My research aims to explain these deviations and their consequences.
Ask Robert J. Shiller the follow-up →