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Bob Shiller on bubbles and psychology

This was an interview in last December from PBS.

Bob Shiller: The whole idea that the stock market reflects fundamentals is, I think, wrong. It really reflects psychology. The aggregate stock market reflects psychology more than fundamentals.

Shiller also pointed out why economists at the Fed will not call it a bubble even when they see it – This has something to do with group think and self-censorship.

 


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