Robert J. Shiller
✓ Source-basedstableAmerican economist
Robert James Shiller is an American economist, academic, and author. As of 2022, he served as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center for Finance.
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Nobel Memorial Prize Laureate Robert J. Shiller during press conference in Stockholm, December 2013![Robert Shiller's plot of the S&P Composite Real Price Index, Earnings, Dividends, and Interest Rates, from Irrational Exuberance, 2d ed.[19] In the preface to this edition, Shiller warns that "[t]he stock market has not come down to historical levels: the price-earnings ratio as I define it in this book is still, at this writing [2005], in the mid‑20s, far higher than the historical average. ... People still place too much confidence in the markets and have too strong a belief that paying attention to the gyrations in their investments will someday make them rich, and so they do not make conservative preparations for possible bad outcomes."](https://upload.wikimedia.org/wikipedia/commons/thumb/6/6f/IE_Real_SandP_Prices%2C_Earnings%2C_and_Dividends_1871-2006.png/500px-IE_Real_SandP_Prices%2C_Earnings%2C_and_Dividends_1871-2006.png)
Robert Shiller's plot of the S&P Composite Real Price Index, Earnings, Dividends, and Interest Rates, from Irrational Exuberance, 2d ed.[19] In the preface to this edition, Shiller warns that "[t]he stock market has not come down to historical levels: the price-earnings ratio as I define it in this book is still, at this writing [2005], in the mid‑20s, far higher than the historical average. ... People still place too much confidence in the markets and have too strong a belief that paying attention to the gyrations in their investments will someday make them rich, and so they do not make conservative preparations for possible bad outcomes."![Price-earnings ratios as a predictor of twenty-year returns based on the plot by Robert Shiller (Figure 10.1,[19][20]). The horizontal axis shows the Cyclically adjusted Price-Earnings (CAPE) ratio of the S&P Composite Stock Price Index as computed in Irrational Exuberance (inflation adjusted price divided by the prior ten-year mean of inflation-adjusted earnings). The vertical axis shows the geometric average real annual return on investing in the S&P Composite Stock Price Index, reinvesting dividends, and selling twenty years later. Data from different twenty-year periods is color-coded as shown in the key. See also ten-year returns. Shiller states that this plot "confirms that long-term investors - investors who commit their money to an investment for ten full years - did do well when prices were low relative to earnings at the beginning of the ten years. Long-term investors would be well advised, individually, to lower their exposure to the stock market when it is high, as it has been recently, and get into the market when it is low."[19]](https://upload.wikimedia.org/wikipedia/commons/thumb/7/77/Price-Earnings_Ratios_as_a_Predictor_of_Twenty-Year_Returns_%28Shiller_Data%29.png/500px-Price-Earnings_Ratios_as_a_Predictor_of_Twenty-Year_Returns_%28Shiller_Data%29.png)
Price-earnings ratios as a predictor of twenty-year returns based on the plot by Robert Shiller (Figure 10.1,[19][20]). The horizontal axis shows the Cyclically adjusted Price-Earnings (CAPE) ratio of the S&P Composite Stock Price Index as computed in Irrational Exuberance (inflation adjusted price divided by the prior ten-year mean of inflation-adjusted earnings). The vertical axis shows the geometric average real annual return on investing in the S&P Composite Stock Price Index, reinvesting dividends, and selling twenty years later. Data from different twenty-year periods is color-coded as shown in the key. See also ten-year returns. Shiller states that this plot "confirms that long-term investors - investors who commit their money to an investment for ten full years - did do well when prices were low relative to earnings at the beginning of the ten years. Long-term investors would be well advised, individually, to lower their exposure to the stock market when it is high, as it has been recently, and get into the market when it is low."[19]In their own words 3
I was reminded of how much I had misjudged the potential the profession would see in the time series rational expectations models.
Robert J. Shiller (1984), Review of Rational Expectations and Econometric Practice by Robert E. Lucas, Thomas J. Sargent.
To understand the economy then is to comprehend how it is driven by the animal spirits.
George Akerlof and Robert Shiller. Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, 2009,
This [covariance] is something that is not in the habit of thinking of most amateur investors.
Robert Shiller. Chalk Talk - Covariance, Financial Markets (Coursera).
Awards 8
Connected to Robert 6
Oliver E. WilliamsonAlso won honorary doctor of Paris Dauphine University
Raghuram RajanAlso won Deutsche Bank Prize in Financial Economics
Pascal LamyAlso won Global Economy Prize
Guido ImbensAlso won Prize in Economic Sciences in Memory of Alfred Nobel
William F. SharpeAlso won Prize in Economic Sciences in Memory of Alfred Nobel
Robert C. MertonAlso won honorary doctor of Paris Dauphine UniversityAbout this person
Robert James Shiller is an American economist, academic, and author. As of 2022, he served as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center for Finance. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since 1980, was vice president of the American Economic Association in 2005, its president for 2016, and president of the Eastern Economic Association for 2006-2007. He is also the co‑founder and chief economist of the investment management firm MacroMarkets LLC.
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