First published 1990
Market Volatility examines why financial markets experience sudden crashes, real estate booms, and unexpected interest rate shifts. Robert Shiller presents his theory that popular opinion and investor psychology drive price swings more than fundamental economic factors. The book compiles twelve years of research challenging standard efficient market models. Shiller argues that widely held beliefs about markets cause investors to misinterpret economic data, creating price movements unrelated to actual economic shocks. Through statistical analysis of stock market crashes like October 1987 and housing market cycles, he demonstrates how collective psychology shapes financial outcomes. The work includes collaborative research with economists John Campbell, Karl Case, Sanford Grossman, and Jeremy Siegel. Shiller extends his analysis beyond individual markets to examine how speculative pricing affects broader macroeconomic activity. The book offers readers new frameworks for understanding market behavior across stocks, bonds, and real estate through the lens of behavioral economics.
Genres: psychology, business, economics, non-fiction, finance, academic
Vibes: thought-provoking
Tropes: academic-research, data-analysis, economic-theory
478 pages · Hardcover · Mit Pr