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Shiller Wins Nobel Economic Prize

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http://www.bbc.co.uk/news/world-middle-east-24517595

Trio awarded Nobel economics prize

The 2013 Nobel Prize in economics has been awarded to Eugene Fama, Lars Peter Hansen and Robert Shiller.

It was awarded for their "empirical analysis of asset prices", according to the awarding committee.

The committee said the trio's separate pieces of work had "laid the foundation for the current understanding of asset prices".

The prize is worth 8m Swedish krona (£775,000; $1.2m), which will be shared equally among the three winners.

Robert Shiller of the famous Case-Shiller HP index in the US amongst other things.

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http://en.wikipedia.org/wiki/Robert_J._Shiller

His book Irrational Exuberance (2000) – a New York Times bestseller – warned that the stock market had become a bubble in March 2000 (the very height of the market top) which could lead to a sharp decline.

In 2003 Shiller co-authored a Brookings Institution paper called "Is There a Bubble in the Housing Market?". Shiller subsequently refined his position in the 2nd edition of Irrational Exuberance (2005), acknowledging that “further rises in the [stock and housing] markets could lead, eventually, to even more significant declines… A long-run consequence could be a decline in consumer and business confidence, and another, possibly worldwide, recession. This extreme outcome … is not inevitable, but it is a much more serious risk than is widely acknowledged.” Writing in the Wall Street Journal in August 2006, Shiller again warned that "there is significant risk of a very bad period, with slow sales, slim commissions, falling prices, rising default and foreclosures, serious trouble in financial markets, and a possible recession sooner than most of us expected.”[10] In September 2007, almost exactly one year before the collapse of Lehman Brothers, Shiller wrote an article in which he predicted an imminent collapse in the U.S. housing market, and subsequent financial panic.[11]

Sounds like a good'un.

Edited by Dorkins

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There isn't a Nobel Prize in Economics.

EDIT: From Wiki:

I know that having met several winners of both kinds ;)

The BBC have now updated the story with only half the story of why this one is different.

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Indeed.

He set up the US equivalent of the UK's Haliwide type indices known as the Case-Shiller Index.

What are his wider economic views? It seems they promote economists who espouse the illuminatis agenda at that particular time. In the late 70s it was Friedman who won with his doctrine of privatization, then in the clinton/bliar era Stiglitz and all the third way private/public subsidize -our-losses nonsense, lately Krugman with his spend spend spend rhetoric.

What pearls of wisdom does Shiller have?

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Indeed.

He set up the US equivalent of the UK's Haliwide type indices known as the Case-Shiller Index.

It's rubbish. Months out of date and penked around with. You're much better off looking at the real-time data.

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Wasn't the prize split between him and Fama, (the father of "efficient market theory") which Shiller actually debunked?

Fama's already disowned Efficient Markets. Must be for some other daft idea.

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Today's Huffington Post. http://www.huffingtonpost.co.uk/2013/10/15/robert-shiller-nobel_n_4099702.html

The UK is going through a housing bubble, according to Robert Shiller, who recently won a Nobel Prize for Economics for his work including the successful prediction of the 2007 house price crash.

Shiller blamed the new housing bubble on the availability of easy credit, telling BBC's Newsnight: “It looks somewhat like a bubble, prices are going up pretty fast. Whenever you have easy credit, that helps promote a bubble.”

The Nobel Laureate's warning comes as official figures released today found that the average house prices in the UK were now above their 2008 pre-recession peak after growing 3.8% over the last year.

There's a short video too, but he backtracks from it bit saying his focus is on knowing US market better, just saying re UK "prices are going up pretty fast."

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Read "Irrational Exhuberance". I read it in 2006 months before it all hit the fan. Very readable - not what you expect from a 'Nobel Prize' winner. Still relevant.

I always thought that was greenspans term...although when the govt has your back, i dont see anything irrational about it. I will look into reading the book though.

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Wasn't the prize split between him and Fama, (the father of "efficient market theory") which Shiller actually debunked?

Wouldnt surprise me. Krugmans award winning paper was on free trade, views he apparently now himself disagrees with :lol:

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