Quotes from Robert J. Shiller

Koopmans pointed out, traditional economic approaches fail to examine the role of public beliefs in major economic events—that is, narrative. By incorporating an understanding of popular narratives into their explanations of economic events, economists will become more sensitive to such influences when they forecast the future.

The world solidly abandoned the gold standard in 1971. Since then, countries have used fiat money—that is, money not backed by anything.

we don't want to forecast but to warn. We don't ever want to forecast a disaster; we want to take actions that will prevent the disaster from happening.

Aristotle, around 350 BCE, raised the possibility of machines replacing humans: For if every instrument could accomplish its own work, obeying or anticipating the will of others, like the statues of Daedalus, or the tripods of Hephaestus, which, says the poet, "of their own accord entered the assembly of the Gods"; if, in like manner, the shuttle would weave and the plectrum touch the lyre without a hand to guide them, chief workmen would not want servants, nor masters slaves.

It has been difficult for scholars to research popular narratives, focusing on the core elements that make them contagious, without being accused of taking sides in political, or sometimes religious, controversies.

Apple bought Siri from its creator, SRI (Stanford Research Institute) International, which had developed it with government funding from the US Defense Advanced Research Projects Agency (DARPA) between 2003 and 2008.

false stories had six times the retweeting rate on Twitter as true stories. The researchers did not interpret that finding as specific to Twitter, and the result may be specific to the time of the study, a time when mistrust of conventional media sources was higher than usual. Rather, these authors interpreted their results as confirming that people are "more likely to share novel information." In other words, contagion reflects the urge to titillate and surprise others.

unemployed people described "have been superannuated less by age than by newly invented machines.

unlike economists, the general public believed in a wage lag hypothesis: the idea that wage increases would forever lag behind price increases, and therefore that inflation had a direct and long-term negative impact on living standards. In short, the wage-price spiral offered a geometrical mental image of one's economic status spiraling down for as long as strong aggressive demands of labor kept it happening.

One reason why the human race as a whole has not measured up to its possibilities, to its promise; one reason why we see everywhere splendid ability doing the work of mediocrity, is because people do not think half enough of themselves. We do not realize our divinity; that we are part of the great causation principle of the universe. We do not know our strength and not knowing we can not use it.

The "technology is taking over our lives" narrative is the most recent incarnation of a labor-saving-machinery narrative that has scared people since the Industrial Revolution.

The phrase American Dream has a ring of truth to it as a statement of American values. The United States is a proud country that has no aristocracy, allows no titles or royalty, announces in its Declaration of Independence that "all men are created equal," and allows free enterprise to proceed with little government interference. However, it is also a country that permitted slavery until 1863.

The federal government operates pretty much in line with the quip, "If it moves, tax it; if you can't tax it, control it; if you can't control it, give it a million dollars.

Contagion is strongest when people feel a personal tie to an individual in or at the root of the story, whether a stock personality type or a real celebrity.

Narrative economics demonstrates how popular stories change through time to affect economic outcomes, including not only recessions and depressions, but also other important economic phenomena. The idea that house prices can only go up attaches to the stories of rich house flippers seen on television. The idea that gold is the safest investment attaches to stories of war and depression. These narratives have a contagious element, even if their attachment to any given celebrity is tenuous.

Rumor is the ancient Latin word for contagious narrative.

One should have a wide variety of assets in one's portfolio. And oil, by the way, is a particularly important asset to have in one's portfolio because we need it, and the economy thrives on it.

Life's meaning heavily benefits from lifelong bonds.

If I was counselling an individual, and my purpose was to help that individual, the most important thing would be that you should save more. Because don't expect that your retirement will follow those trajectories that some advisers are telling you.

Fear causes individuals to restrain their spending and firms to withhold investments; as a result, the economy weakens, confirming their fear and leading them to restrain spending further. The downturn deepens, and a vicious circle of despair takes hold.

The desperately poor may accept handouts, because they feel they have to. For those who consider themselves at least middle class, however, anything that smacks of a handout is not desired. Instead, they want their economic power back.

This is the paradox of thrift: belt-tightening causes people to lose their jobs, because other people are not buying what they produce, so their debt burden rises rather than falls.

Oppression thrives on distance - on not actually meeting or seeing the oppressed.

What would be better, that people build big houses thinking that they'll make capital gains or that they send their children to medical school and they do research on curing diseases? When you put it that way, it seems obvious. There has developed a sense of personal worth that's tied to one's house.