Over at The Atlantic. Shiller is the author of Irrational Exuberance, The Subprime Solution and Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global. As I've noted before, Shiller's specific arguments about the causal sequences behind manias and crashes leave a lot to be desired, but it seems entirely correct that he bet on the right horse when it comes to behavioral economics and the importance cognitive biases outside of the bounds of rationality in a market. The same phenomenon can be described from a different angle, such as Benoit Mandelbrot's The…
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