By Robert J. Shiller
(Broadway Business, Paperback, 9780767923637, 304pp.)
Publication Date: May 9, 2006
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The original and bestselling 2000 edition of "Irrational Exuberance" evoked Alan Greenspan's infamous 1996 use of that phrase to explain the alternately soaring and declining stock market. It predicted the collapse of the tech stock bubble through an analysis of the structural, cultural, and psychological factors behind levels of price growth not reflected in any other sector of the economy. In the second edition (2005), Shiller folded real estate into his analysis of market volatility, marshalling evidence that housing prices were dangerously inflated as well, a bubble that could soon burst, leading to a "string of bankruptcies" and a "worldwide recession." That indeed came to pass, with consequences that the 2009 preface to this edition deals with.
"Irrational Exuberance" is more than ever a cogent, chilling, and astonishingly far-seeing analytical work that no one with any money in any market anywhere can afford not to read-and heed.