Long a student of the irrational element in economics - some have suggested that Shiller should share credit with former Fed Chairman Alan Greenspan as the source of the concept of “ irrational exuberance” - Shiller has turned his attention of late to the related concept of what he calls “narrative economics.” In fact, Shiller thinks that market volatility may well be driven by not only numerical factors, but by the stories people tell each other about financial conditions - no matter if they’re true or not. Shiller, a co-winner of the 2013 Nobel Prize in economics and Sterling Professor of Economics at Yale University. Although this has become the dominant way of thinking about the movement of asset prices, CFOs may be overdoing it if they don’t account for the illogical, the irrational and, yes, the creative element in the human mind, says Robert J.
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