Irrational exuberance

Yale economist Robert Shiller revisits the subject that first made him widely known: the swings of financial markets. This new edition sharpens his earlier argument, presenting more plainly the excesses that keep unsettling the economy and the lives of ordinary people. He first came to prominence with a 2000 book on the same theme.

Expanding on his original work, Shiller traces the psychological roots of market instability and now applies the same lens to housing. He argues that investment in every kind of capital market in a modern free economy is inherently unstable, shaped by deeply human behavior. The title comes from Alan Greenspan's famous description of that behavior.

Shiller's remedy is structural rather than personal. He proposes better designed public institutions, including an overhauled social security system, new insurance products that protect incomes and homes, and a wider range of investment choices.