Irrational exuberance PDF- 3rd edition

Irrational exuberance PDF- 3rd edition

Irrational exuberance PDF- 3rd edition (2015) 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.

Category: Stock

Author: Robert Shiller

tag: Robert Shiller

Language: English

Free Download link: At the end of the post

Introduction

The book proper begins with three introductory chapters that place in historical context the ups and downs of the three major markets for investors: the stock market, the bond market, and the real estate market.

Chapter 2 is new to this third edition of the book, added in response to widespread concern about a possible bond market bubble. The three chapters allow us to see how remarkable fluctuations in these markets have been, and to gain overall perspectives on trends in the markets.

Part One discusses the structural factors that drive market bubbles. This part begins, in Chapter 4, with a discussion of the precipitating factors that cause market fluctuations: events outside the markets, such as politics, technology, and demography. The chapter lists precipitating factors that are ultimately, largely through their effects on investor psychology, behind three recent stock market booms: the Millennium Boom, 1982–2000; the Ownership-Society Boom, 2003–7; and the NewNormal Boom, 2009 to the present. It is important even today to go
through the precipitating factors of past booms to help us appreciate the diverse kinds of things that may drive booms of the future.

Part Two considers cultural factors that further reinforce the structure of the speculative bubble. The news media, discussed in Chapter 6, are critical, since they amplify stories that have resonance with investors, often regardless of their validity. Chapter 7 analyzes the “new era” theories that tend to arise spontaneously from time to time. In this edition, the analysis applies to both the stock market and the real estate market. The popularity of these theories is seen to derive from activity in the markets themselves, not from disinterested analysis of the true merit of these stories. Chapter 8 looks at the major stock market booms around the world in the past half century and describes the kind of new eratheories that arose in association with many of them.

Part Three considers psychological factors that underlie market behavior. Chapter 9 argues that, with the true value of the markets so poorly defined by economic and financial theory, and so difficult to compute, the public relies on some largely psychological anchors for market value. Chapter 10 describes some important results from social
psychology and sociology that help us understand why so many different people change their opinions at the same time.

Part Four investigates attempts on the part of academic and popular thinkers to rationalize market bubbles. Chapter 11 considers the efficient markets theory. Chapter 12 discusses the theory, often advanced during a bubble, that the public has just learned some important fact—even though the “fact” either is questionable or has already been widely known for some time.

Part Five, Chapter 13, considers the implications of speculative bubbles for individual investors, institutions, and governments. Several prescriptions for urgently needed policy changes are offered at this time of vulnerability in both the stock market and the real estate market, as are suggestions for ways in which individual investors can lower their exposure to the consequences of a “burst” bubble.

This edition of the book has also added, as an appendix, the revised version of the Nobel lecture I gave at the Nobel Prize events in Stockholm in December 2013. The Nobel lecture puts many of the arguments of the book into a broader context, with additional references to academic discussions of some of the basic conclusions here.

Contents- Irrational exuberance PDF- 3rd edition

One: The Stock Market in Historical Perspective 1
Two: The Bond Market in Historical Perspective 11
Three: The Real Estate Market in Historical Perspective 18

Part One: Structural Factors
Four:
Precipitating Factors: The Internet, the Capitalist Explosion, and Other Events
Five: Amplification Mechanisms: Naturally Occurring Ponzi Processes 70

Part Two: Cultural Factors
Six:
The News Media 101
Seven: New Era Economic Thinking 123
Eight: New Eras and Bubbles around the World 150

Part Three: Psychological Factors
Nine:
Psychological Anchors for the Market 165
Ten: Herd Behavior and Epidemics 175

Part Four: Attempts to Rationalize Exuberance
Eleven:
Efficient Markets, Random Walks, and Bubbles 195
Twelve: Investor Learning—and Unlearning 214

Part Five: A Call to Action
Thirteen:
Speculative Volatility in a Free Society 225
Appendix Nobel Prize Lecture: Speculative Asset Prices 239
Notes 281
References 321
Index 339

About the author

Robert Shiller (born March 29, 1946) is an American economist (Nobel Laureate in 2013), academic, and best-selling author. As of 2019, he serves as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management’s International Center for Finance. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since 1980, was vice president of the American Economic Association in 2005, its president-elect for 2016, and president of the Eastern Economic Association for 2006–2007. He is also the co‑founder and chief economist of the investment management firm MacroMarkets LLC.

>> Read more about Robert Shiller and his books on E4T

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