Thursday, September 25, 2008
In March 2000, Yale economist Robert Shiller published Irrational Exuberance and warned that the long-running parabolic stock market was a bubble. Weeks later, the market cracked and Shiller was the new guru. Fast forward a few years, Shiller released a second edition of the same book, this time arguing that the housing market was the latest and greatest bubble. And, we all know how that prediction played out.
Now, Shiller is back with a new book: The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do about It. And given his track record, his understanding of the problem and solutions are worth listening to. Below, we have posted an interview with Shiller where he gets into all of this. The first part appears below. For the second part, click here (and here is where he particularly gets to talking about solutions).
P.S. If you’re wondering what Shiller thinks about more recent events, you can watch this new BusinessWeek video.
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