Robert Shiller

The most important thing to remember about the stock market is that it is a social institution. It is not just a collection of numbers. It is a collection of people, and their beliefs, and their stories.

Financial markets are not perfectly efficient. They are subject to fads, fashions, and psychological biases.

Narrative economics is about how popular stories, whether true or false, influence economic behavior.

Bubbles are social epidemics. They are driven by contagion of enthusiasm.

The CAPE ratio is not a market timing tool, but it is a good indicator of long-term expected returns.

People are not always rational. They are often driven by emotions and social pressures.

The housing market is not immune to bubbles. In fact, it is particularly susceptible to them.

Financial innovation is a double-edged sword. It can be beneficial, but it can also create new risks.

The future is inherently uncertain. We should not pretend that we can predict it with perfect accuracy.

Economics is not just about numbers. It is about human behavior and human psychology.

We need to be more humble about our ability to understand and control financial markets.

The efficient market hypothesis is a useful benchmark, but it is not a perfect description of reality.

Behavioral economics is about bringing psychology into economics.

The financial crisis of 2008 was a wake-up call. It showed us that we need to be more vigilant about financial risks.

The stock market is a voting machine in the short run, but a weighing machine in the long run.

We need to think about how to design institutions that are more resilient to financial crises.

The internet bubble was a classic example of irrational exuberance.

The housing bubble was fueled by a narrative of ever-increasing home prices.

We need to educate people about financial risks and how to make informed decisions.

The stock market is not a casino, but it can sometimes behave like one.