Robert Shiller

Robert Shiller is a Yale professor and recipient of the 2013 Nobel Prize in Economics (shared with Eugene Fama and Lars Peter Hansen). His research demonstrated that equity prices are excessively volatile relative to dividend fundamentals, challenging the efficient market hypothesis. He developed the Cyclically Adjusted P/E (CAPE) ratio for stock market valuation and co-created the S&P/Case-Shiller Home Price Indices. His books "Irrational Exuberance" (2000) and "Animal Spirits" helped bring behavioral economics into mainstream financial discourse. The CAPE ratio — averaging ten years of real earnings to smooth cyclical noise — became the most widely cited long-horizon equity valuation metric used by institutional investors and endowments globally. His warning about US equity market overvaluation in "Irrational Exuberance," published just before the dot-com peak in 2000, and his subsequent warnings about housing prices ahead of the 2008 crisis, established him as one of the few prominent economists who successfully identified major asset bubbles in real time. His "narrative economics" framework, developed in his later career, explores how popular stories and economic narratives shape macroeconomic behavior.