Irrational Exuberance: Revised and Expanded Third edition by Robert J. ShillerIrrational Exuberance: Revised and Expanded Third edition by Robert J. Shiller

Irrational Exuberance: Revised and Expanded Third edition

byRobert J. Shiller

Hardcover | January 25, 2015

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In this revised, updated, and expanded edition of his New York Times bestseller, Nobel Prize-winning economist Robert Shiller, who warned of both the tech and housing bubbles, cautions that signs of irrational exuberance among investors have only increased since the 2008-9 financial crisis. With high stock and bond prices and the rising cost of housing, the post-subprime boom may well turn out to be another illustration of Shiller's influential argument that psychologically driven volatility is an inherent characteristic of all asset markets. In other words, Irrational Exuberance is as relevant as ever. Previous editions covered the stock and housing markets-and famously predicted their crashes. This edition expands its coverage to include the bond market, so that the book now addresses all of the major investment markets. It also includes updated data throughout, as well as Shiller's 2013 Nobel Prize lecture, which places the book in broader context. In addition to diagnosing the causes of asset bubbles, Irrational Exuberance recommends urgent policy changes to lessen their likelihood and severity-and suggests ways that individuals can decrease their risk before the next bubble bursts. No one whose future depends on a retirement account, a house, or other investments can afford not to read this book.

Robert J. Shiller, the recipient of the 2013 Nobel Prize in economics, is a bestselling author, a regular contributor to the Economic View column of the New York Times, and a professor of economics at Yale University. For more information, please go to
Title:Irrational Exuberance: Revised and Expanded Third editionFormat:HardcoverDimensions:392 pagesPublished:January 25, 2015Publisher:Princeton University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0691166269

ISBN - 13:9780691166261

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Table of Contents

List of Figures and Tablesix

Preface to the Third Editionxi

Preface to the Second Edition, 2005xix

Preface to the First Edition, 2000xxv


1 The Stock Market in Historical Perspective 1

2 The Bond Market in Historical Perspective 11

3 The Real Estate Market in Historical Perspective 18

Part 1 Structural Factors

4 Precipitating Factors: The Internet, the Capitalist Explosion, and Other Events 39

5 Amplification Mechanisms: Naturally Occurring Ponzi Processes 70

Part 2 Cultural Factors

6 The News Media 101

7 New Era Economic Thinking 123

8 New Eras and Bubbles around the World 150

Part 3 Psychological Factors

9 Psychological Anchors for the Market 165

10 Herd Behavior and Epidemics 175

Part 4 Attempts to Rationalize Exuberance

11 Efficient Markets, Random Walks, and Bubbles 195

12 Investor Learning-and Unlearning 214

Part 5 A Call to Action

13 Speculative Volatility in a Free Society 225

Appendix Nobel Prize Lecture: Speculative Asset Prices 239




Editorial Reviews

"Shiller provides an excellent synthesis of all the evidence contradicting the efficient market hypothesis, especially how a form of irrational exuberance sometimes leads to price bubbles. . . . Without any doubt, Irrational Exuberance must be read by anyone interested in finance. And it really can be read by anyone interested in finance because the genius of this book is to explain complex phenomena easily, avoiding specialist jargon, including mathematics."---David Le Bris, Journal of Economics