Surveying the economic horizon: A conversation with Robert Shiller

McKinsey Quarterly:

In this video interactive, economist Robert Shiller discusses four aspects of the current crisis: regulating for financial innovation, reducing trust in models, redesigning institutions, and the time line for turnaround. His perspectives are informed in part through his research that psychology--particularly an understanding of human irrationality--can play a key role in explaining economic breakdowns and exploring effective solutions.

Robert Shiller is a professor of economics at Yale University and cocreator of the Case-Shiller House Price Index, which is now one of the most widely used methods of measuring performance in that industry. He also introduced into intellectual circulation the phrase "irrational exuberance," which was picked up famously by Alan Greenspan in 1996. Shiller's body of work on financial markets and economics includes the books Irrational Exuberance and, most recently, Animal Spirits.1

It is important to note that Case-Schiller monitors only 20 US markets ("Metropolitan regions").