Irrational Exuberance

Irrational exuberance is not that crazy. The once-popular terms speculative
mania or speculative orgy seemed too strong to describe what we were going
through in the 1990s. It was more like the kind of bad judgment we all remember
having ...

Author: Robert J. Shiller

Publisher: Princeton University Press

ISBN: 0691173125

Category: Business & Economics

Page: 392

View: 99

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.

Irrational Exuberance Reconsidered

lrrational Exuberance Reconsidered How do we know when irrational
exuberance has unduly escalated asset values? (Alan Greenspan) In a speech
before the annual dinner for the American Enterprise Institute in Washington on
December ...

Author: Mathias Külpmann

Publisher: Springer Science & Business Media

ISBN: 3540247653

Category: Business & Economics

Page: 230

View: 960

Mathias Külpmann presents a framework to evaluate whether the stock market is in line with underlying fundamentals. The new and revised edition offers an up to date introduction to the controversy between rational asset pricing and behavioural finance. Empirical evidence of stock market overreaction are investigated within the paradigms of rational asset pricing and behavioural finance. Although this monograph will not promise the reader to become a millionaire, it offers a road to obtain a deeper understanding of the forces which drive stock returns. It should be of interest to anyone interested in what drives performance in the stock market.


The Law and Economics of Irrational Behavior

1998 , 2002 ; Gilbert and Wilson 2000 ; Loewenstein , Nagin , and Paternoster
1997 ; Loewenstein , O ' Donoghue , and Rabin 2003 ; Loewenstein and
Schkade 1999 ; Wilson 2002 ) . Because irrational exuberance and anxiety occur
before ...

Author: Francesco Parisi

Publisher: Stanford University Press

ISBN: 9780804751445

Category: Business & Economics

Page: 613

View: 228

This collection of essays explores the most relevant developments at the interface of economics and psychology, giving special attention to models of irrational behavior, and draws the relevant implications of such models for the design of legal rules and institutions. The application of economic models of irrational behavior to law is especially challenging because specific departures from rational behavior differ markedly from one another. Furthermore, the analytical and deductive instruments of economic theory have to be reshaped to deal with the fragmented and heterogeneous findings of psychological research, turning towards a more experimental and inductive methodology. This volume brings together pioneering scholars in this area, along with some of the most exciting developments in the field of legal and economic theory. Areas of application include criminal law and sentencing, tort law, contract law, corporate law, and financial markets.


The Successful Investor Today

Irrational. Exuberance. On December 5, 1996, Alan Greenspan, arguably the
most influential man in terms of the capital markets, described the state of the
U.S. stock market as “irrationally exuberant.” His comment reflected what he felt
was a ...

Author: Larry E. Swedroe

Publisher: Truman Talley Books

ISBN: 1429909366

Category: Business & Economics

Page: 336

View: 443

What does it take to achieve superior performance and become a successful investor? Rather than great stock pricing or market timing skills, it is far better for you to understand how the markets work and how to make them work best for you. Larry E. Swedroe argues that the right strategy never changes, no matter whether the bull is stampeding or the bear has emerged from hibernation. The Successful Investor Today was written during one of the greatest bear markets of the post-World War II era--a bear market that was a result of the inevitable bursting of the technology-led bubble of the late 1990s (what Federal Reserve Chairman Alan Greenspan called "irrational exuberance"). Although millions of investors unnecessarily incurred trillions of dollars in losses, neither this bubble, nor the ensuing devastating losses, were anything new. Despite all the horrible investment experiences that have been reported, those investors who followed the fourteen simple truths outlined in this book--including the building of globally diversified portfolios-did not suffer the devastating losses experienced by many others. The fourteen simple truths withstand the tests of logic and time in the way the stock market really works, rather than the way Wall Street and the media would have you believe it works. Since it is generally held that those who fail to plan, plan to fail, an investor must begin with an investment plan. Your plan should be tailored to conform to your unique ability, willingness, and need to take risk. In The Successful Investor Today, you will learn how to build, write, implement, and manage your investment plan over time. This book will help you become a better and more informed investor, and it will help you achieve your financial goals by gradually increasing your wealth. Apart from offering an up-to-date winning strategy, The Successful Investor Today presents an efficient and proven way to avoid the most common--and costly--mistakes investors continue to make.

Creating a Learning Society

Firms that are irrational can exert a negative externality on others—and cause
them not to survive. the standard argument in economics is that if a firm is
irrational (say, has irrational exuberance about the future of housing prices), it will
pay the ...

Author: Joseph E. Stiglitz

Publisher: Columbia University Press

ISBN: 0231525540

Category: Business & Economics

Page: 560

View: 828

It has long been recognized that an improved standard of living results from advances in technology, not from the accumulation of capital. It has also become clear that what truly separates developed from less-developed countries is not just a gap in resources or output but a gap in knowledge. In fact, the pace at which developing countries grow is largely a function of the pace at which they close that gap. Thus, to understand how countries grow and develop, it is essential to know how they learn and become more productive and what government can do to promote learning. In Creating a Learning Society, Joseph E. Stiglitz and Bruce C. Greenwald cast light on the significance of this insight for economic theory and policy. Taking as a starting point Kenneth J. Arrow's 1962 paper "Learning by Doing," they explain why the production of knowledge differs from that of other goods and why market economies alone typically do not produce and transmit knowledge efficiently. Closing knowledge gaps and helping laggards learn are central to growth and development. But creating a learning society is equally crucial if we are to sustain improved living standards in advanced countries. Combining accessible prose with technical economic analysis, Stiglitz and Greenwald provide new models of "endogenous growth," up-ending thowhe thinking about both domestic and global policy and trade regimes. They show well-designed government trade and industrial policies can help create a learning society, and how poorly designed intellectual property regimes can retard learning. They also explain how virtually every government policy has effects, both positive and negative, on learning, a fact that policymakers must recognize. They demonstrate why many standard policy prescriptions, especially those associated with "neoliberal" doctrines focusing on static resource allocations, have impeded learning. Among the provocative implications are that free trade may lead to stagnation whereas broad-based industrial protection and exchange rate interventions may bring benefits—not just to the industrial sector, but to the entire economy. The volume concludes with brief commentaries from Philippe Aghion and Michael Woodford, as well as from Nobel Laureates Kenneth J. Arrow and Robert M. Solow.

Irrational Markets and the Illusion of Prosperity

Certainly, Greenspan, as head of the Federal Reserve, took a highly unusual
step in raising the issue of “irrational exuberance.” Fed chairmen by tradition don'
t raise controversial issues that might be misinterpreted by the general public.

Author: Don DeVitto

Publisher: Routledge

ISBN: 1135949905

Category: Business & Economics

Page: 180

View: 557

First Published in 2001. Routledge is an imprint of Taylor & Francis, an informa company.

The Efficient Market Hypothesists

Section 6 Robert Shiller and Irrational Exuberance Through the late 1970s, the
market plunge of 1987, and the bubble and gyrations of the 1990s and beyond,
the field of finance became increasingly divided. Classical financial theorists and
 ...

Author: Colin Read

Publisher: Palgrave Macmillan

ISBN: 0230274218

Category: Business & Economics

Page: 222

View: 503

Describes the lives, theories, and legacies of six great minds in finance who changed the way we look at financial markets and equilibrium. Bachelier, Samuelson, Fama, Ross, Tobin, and Shiller; proponents and critics of the market efficiency theories who redefined modern finance, creating the foundation on which all financial analysis rests.

The Predictable Surprise

10 The phrase “irrational exuberance” stuck in the public mindset, and Shiller
made it the title of his bestselling book, published in 2000, on the overvaluation of
U.S. stocks. On the book's dust jacket, Shiller says, “If we think the market is worth
 ...

Author: Sylvester J. Schieber

Publisher: Oxford University Press

ISBN: 0199930090

Category: Political Science

Page: 480

View: 174

Social Security is in jeopardy, private pension systems have fallen apart, and workers are trying to save on their own for retirement with the stock market in the worst shape since the Great Depression. In The Predictable Surprise, Sylvester J. Schieber shows that forewarnings of the coming retirement crisis have been apparent for decades, but we have never mustered the political will to address the problem. This book explains how we have gotten into the retirement predicament and where we can go from here. Schieber, a renowned authority on this topic, provides a compact, insightful history of Social Security, pension plans, and other retirement options, highlighting both their original justifications and the point when things began to go wrong. He brings his discussion right up to the present morass and concludes with suggestions as to how we can reform our retirement system. Our situation is not hopeless, Schieber concludes, if we take on some of these issues and resolve them. If we do not, we will severely jeopardize the prosperity of younger generations.

Mergers Acquisitions

valuegreater thana fivetimes EBITmultiple. Nothing else should. 7 Yet every day
in the Middle Market M&A world, irrational exuberance (hence, the greater fool
theory) makes its delightful (atleastfrom theseller's perspective) presence known
 ...

Author: Dennis J. Roberts

Publisher: John Wiley & Sons

ISBN: 9780470442753

Category: Business & Economics

Page: 448

View: 699

This book was designed not only for owners and managers of middle market businesses but as a training text for middle market M&A investment bankers and consultants. It discusses the art and science of middle market M&A as well the all-important psychology and behind-the-scenes negotiations pursued with a particular emphasis on obtaining the absolute highest value when selling a business. Subjects addressed include valuation, taxation, negotiations, M&A conventions, among many others from the buy-side and sell-side perspectives. Subtitled “Tales of A Deal Junkie,” this serious but occasionally irreverent book tells it like it is, including anecdotes to provide a “feel” for what really goes on in middle market transactions. The author, a former practicing CPA and a business valuation expert, is a veteran M&A investment banker with years of real life experience. He also is a widely-acclaimed instructor in the M&A field and a nationally-respected practitioner who has trained thousands of investment bankers. No comparable book on the market today provides this degree of comprehensive and invaluable insight.

Baseball Is America

INTRODUCTION Fed Chairman Alan Greenspan pitched his infamous "irrational
exuberance" phrase in an early 1996 December speech to the American
Enterprise Institute during the stock market boom of the 1990s. The key text in the
 ...

Author: Victor Alexander Baltov, Jr.

Publisher: AuthorHouse

ISBN: 1449028381

Category: Biography & Autobiography

Page: 516

View: 769

BASEBALL IS AMERICA explores America's Pastime through a trilogy of books: "A Child of Baseball" bats leadoff. Baseball, the bellybutton of society is a metaphor for America, acting both as its direction and reflection. Baseball is America, America is baseball. American history, embracing its religious past as a Christian nation, and baseball history, including its synthetic enhancement precedent, is traced through a tapestry of time in a life story format. Born into the Glory Days of New York baseball in 1955, baseball provides the author both identity and meaning. Narrative backdrops track both Reds and Yankee baseball, making historic stops over a 100+ year timeline. A 40+ year playing career is traced from 1962 Edison Little League through 2005 Roy Hobbs World Series in Edison's winter home (Fort Myers). Symbolism, baseball-speak, numerology, simile, nickname, euphemism and metaphor applications create a thought provoking and intriguing word sleuth effect exploring topics deep down in places we don't talk about at parties. Satire and cynical humor stragically integrated buffers acid discussion of controversial issues. Sixties youth ball is viewed and described through a Garden State lens. Seventies ball scenery drastically switches to the Sooner State while the 80's, 90's and new millenium take on a Lone Star State flavor with Space City the focal point. Pop culture, American history (including its Christian nation history) is tactically incorporated into the read. Baseball remains the only venue in America where religion can be pitched into public square casual conversation without being debased as a "nut-job" or being shown the door. The read displays no reservations of informally discussing topics from both Creator-based and man-based religious perspectives. The events surrounding the 1919 World Series, that the Reds accidentally won, are retold through the lens of a Cincinnati native who actually voted present, the author's grandpa.

Why the Bubble Burst

The first two remain consistent with the theory of efficient capital markets while
the theory of irrational exuberance is diametrically opposed. The supply and
demand theory, which we develop later in this chapter, is consistent with the
notion of ...

Author: Lawrance Lee Evans

Publisher: Edward Elgar Publishing

ISBN: 9781781957264

Category: Business & Economics

Page: 237

View: 305

Providing a comprehensive look at the most dramatic run-up in equity values in US history, this volume takes the reader from theory to empirics, illustrating why we need to go beyond the efficient markets hypothesis and the theory of domestic irrational exuberance to fully unpack the unprecedented phenomenon, why the market was destined for a major decline and why the fallout will be severe and protracted.

Market Madness

This book is about what you might call the flip side of irrational exuberance— “
irrational anxiety” might be the right term, or perhaps “irrational pessimism.” Like “
irrational exuberance,” the phrase that Federal Reserve Chairman Alan ...

Author: Blake C. Clayton

Publisher: Oxford University Press, USA

ISBN: 0199990050

Category: Business & Economics

Page: 221

View: 276

"In Market Madness, Dr. Blake Clayton, a Wall Street stock analyst and former Oxford researcher, draws on a century's worth of statistical data to offer a revolutionary new look the history of oil and future of energy. The culmination of a multi-year study, he shows how generational fears about an imminent, irreversible shortage of oil punctuate the history of oil since its earliest days. He explores the conditions in which oil supply fears arise, gain popularity, and eventually wane, and shows how important such stories can be in affecting financial markets. He links these episodes to the behavioral concept of irrational exuberance and new era economic thinking, first popularized by Nobel Laureate Yale economist Robert Shiller, to show how unfounded pessimism affects the market for oil and other exhaustible resources. Acknowledging the significant geological and structural changes the oil market has undergone over the last century, the book does not dismiss today's shortage fears out of hand, but asks what they reveal about how commodity markets function and what that means for investors and public officials. Clayton argues that the lessons to be learned from this history are the need for quality data about US and global oil reserves, the importance of clear communication from public officials about energy markets and resources, and the value of transparency in commodities markets. While these measures will not eliminate volatility and unpredictability in energy markets, he writes, they would mitigate unnecessary price spikes and improve investor and government decision-making. The book addresses popular debates in economics and finance on how mass beliefs affect financial markets while also offering a colorful narrative history for general readers about the dramatic booms and busts of the American oil industry"--

Architecture and Capitalism

Irrational. exuberance: Rem. Koolhaas. and. the. 1990s. Ellen. Dunham-Jones.
Irrational exuberance The 1990s saw the end of the cold war, the collapse of the
Soviet Union, the opening of China, and the rise of neoliberalism, globalization, ...

Author: Peggy Deamer

Publisher: Routledge

ISBN: 1135049556

Category: Architecture

Page: 264

View: 377

Architecture and Capitalism tells a story of the relationship between the economy and architectural design. Eleven historians each discuss in brand new essays the time period they know best, looking at cultural and economic issues, which in light of current economic crises you will find have dealt with diverse but surprisingly familiar economic issues. Told through case studies, the narrative begins in the mid-nineteenth century and ends with 2011, with introductions by Editor Peggy Deamer to pull the main themes together so that you can see how other architects in different times and in different countries have dealt with similar economic conditions. By focussing on what previous architects experienced, you have the opportunity to avoid repeating the past. With new essays by Pier Vittorio Aureli, Ellen Dunham-Jones, Keller Easterling, Lauren Kogod, Robert Hewison, Joanna Merwood-Salisbury, Robin Schuldenfrei, Deborah Gans, Simon Sadler, Nathan Rich, and Micahel Sorkin.

The Impact of the Subprime Crisis on Global Financial Markets Banks and International Trade

This chapter develops a GFS-APT-GARCH model to uncover any looming risks to
global financial stability with respect to crisis-induced irrational exuberance for
twenty-nine world major assets. Findings suggest that the crisis has unleashed ...

Author: Indranarain Ramlall

Publisher: Cambridge Scholars Publishing

ISBN: 1443868582

Category: Business & Economics

Page: 193

View: 907

With the occurrence of the US crisis, international focus has shifted from finance to financial stability. This book offers analyses of financial stability risk assessment at three main levels – namely international financial markets, banks and international trade – with the research being innovative, timely and much needed in terms of policy implications. New approaches to policy-making are also suggested to deal with the three crises that presently buffet the world: the debt crisis, an ageing population and climate change.

The Rise of the Corporate Economy in Southeast Asia

Irrational. exuberance. The. fatal. conceit. of. financial. capitalism. in.
contemporary. Indonesia. This chapter examines an important phenomenon –
that of volatile growth within financial institutions in Indonesia since the early
1980s.

Author: Rajeswary Ampalavanar Brown

Publisher: Routledge

ISBN: 1134157541

Category: Business & Economics

Page: 416

View: 633

The Rise of the Corporate Economy in Southeast Asia surveys the growth of large corporations in Southeast Asia, focusing in particular on corporate organization, methods of finance, the business environment and corporate governance. It details the different phases of corporate and financial development, particularly liberalization and globalization from the mid-1980s, the 1997 crisis, and subsequent attempts at liberalization and the reform of corporate governance. Raj Brown considers the key themes of the rise of the Southeast Asian corporate economy, and illustrates the theoretical issues through deployment of carefully selected country-specific case studies from across the region. An examination of critical subjects include: the variety of corporate forms found in Southeast Asia issues of ethnicity the concentration of ownership, particularly among families links between the state, the military, banks and corporations state-owned enterprises and forms of state control the role of foreign capital. Providing a comprehensive analysis of the rise of the corporate economy in Southeast Asia, this study will be an important resource for students of the region and those concerned with theoretical issues of corporate governance.

The Hour Between Dog and Wolf Risk taking Gut Feelings and the Biology of Boom and Bust

They gave us the folly of the dot.com bubble as well as the phrase that best
described it — 'irrational exuberance'. This term, first used by Alan Greenspan in
a speech delivered in Washington in 1996 and subsequently given wide
currency by ...

Author: John Coates

Publisher: HarperCollins UK

ISBN: 0007465106

Category: Business & Economics

Page: 288

View: 328

Now shortlisted for the 2012 Financial Times Business Book of the Year Award and the Wellcome Trust Book Prize, The Hour Between Dog and Wolf is a resonant exploration of economic behaviour and its consequences.

Template driven Consulting

... irrational exuberance' during the 1990s and that of what I would call irrational
apathy or pessimism at the moment - have taken their toll on us, wiping off some
$7 trillion in share-value on the U.S. stock market alone since its peak in 2000.9 ...

Author: Uwe G. Seebacher

Publisher: Springer Science & Business Media

ISBN: 9783540401285

Category: Business & Economics

Page: 253

View: 129

A guide for managers who have been searching for a way to cut costs on expensive external business advice. Template-Driven Consulting (TDC) allows companies to trim down expenses at another source: external consultants. Applying TDC, employees become the experts, providing a cutting-edge advantage-empowering employees to deliver consulting work usually done by high-priced externals. Several case studies lay out how business could gain a long-term competitive advantage by applying the TDC methodology.