Irrational Exuberance: Second Edition

Rating: 4.0/5 Stars
Rank: 185

Having predicted the stock market collapse that began just one month after the first edition was published, he now expands the book to cover other markets that have become volatile, particularly the recently red-hot housing market.

He includes a full chapter on domestic and international housing prices in historical perspective.

Shiller amasses impressive evidence to support his argument that the recent housing market boom bears many similarities to the stock market bubble of the late 1990s, and may eventually be followed by declining home prices for years to come.

After stocks plummeted when the bubble burst in 2000, investors moved their money into housing. This precipitated the inflated real estate prices not only in America, but around the world, Shiller maintains.

Hence, irrational exuberance did not disappear-it merely reappeared in other settings.

Building on the original edition, Shiller draws out the psychological origins of volatility in financial markets, this time folding real estate into his analysis.

He broadens the evidence that investing in capital markets of all kinds in the modern free-market economy is inherently unstable-subject to the profoundly human influences captured in Alan Greenspan's now-famous phrase, "irrational exuberance."

The ultimate solution to this troubling condition, he maintains, would involve better-designed public institutions such as a revamped social security system, new forms of insurance to protect people's incomes and homes, and a broader array of investment options.

As was true of its predecessor, the second edition of Irrational Exuberance is destined to be widely read, discussed, and debated.

Editorials

	From Library Journal
	Taking his book's title and thesis from Alan Greenspan's 1996 description of investors, Shiller (economics, Yale Univ.) studies the current booming U.S. stock market in historical terms. His research into past U.S... read full editorial
	The New York Times Book Review, Louis Uchitelle
	No one has explored the strange behavior of the American investor in the 1990's with more authority, or better timing, than Robert J. Shiller. --This text refers to the Hardcover edition.
	Robert J. Samuelson, The Washington Post
	Alan Greenspan faces long odds in trying to nudge the stock market to where he'd like it to go. The chairman of the Federal Reserve has argued that the buoyant market--by making Americans feel so much... read full editorial

Customer Reviews

	Well documented and written
	(NY, NY) June 12, 2000 - 4.0/5 stars
	The book was well written and straightforward in it's presentation and premises. Although one can't help but agree with the author's conclusion of a stock market bubble and its long-term impact, the author presents ... read full review
	Turned me into a Bull from a Bear
	(Winchester, MA USA) April 18, 2000 - 2.0/5 stars
	I bought this book the moment it came out on Amazon, even before it was discounted. I was rather disappointed; it feels like it was rushed to press and could have used a few more rounds of editing. It has... read full review
	Too Long By About 286 Pages (The Book Is 296 Pages Long)
	(New York, NY) May 22, 2000 - 1.0/5 stars
	I found Professor Schiller's book painful in the extreme. Most of his conclusions could have been summarized in the first paragraph, or perhaps in a longer magazine article. While his views are based on solid academic... read full review

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