rational markets and the human animal, reconsidered
As the country picks itself up from its latest financial spill, it’s vital to consider the assumptions that led people to act the way they did, and to update those assumptions as we move forward.
Here Yale professor Robert Shiller examines the idea that markets “know,” like some omnipotent being, and therefore can never be wrong. Markets are the product of humans, and humans fail.This is not, however, to say government-imposed regulation is the answer, because that, too, is a human endeavor.
At any rate, it’s fascinating to hear an economist wrestle with human psychology, and to speak in a way that incorporates what daily experience often tells us: that people can be very, very stupid.
