June 2, 2001

Robert J. Shiller is the Stanley B. Resor Professor of Economics, Cowles Foundation for Research in Economics, at Yale University.

He received his Ph.D. in economics from the Massachusetts Institute of Technology in 1972.

He is research associate of the National Bureau of Economic Research, a fellow of the American Academy of Arts and Sciences, a fellow of the Econometric Society, a member of the Academic Advisory Panel for the Federal Reserve Bank of New York, and a recipient of a Guggenheim fellowship.

He has written about financial markets, behavioral economics, macroeconomics, real estate, statistical methods, and public attitudes, opinions and moral judgments regarding markets.

Shiller's 1989 book "Market Volatility" (MIT Press) was a mathematical and behavioral analysis of price fluctuations in speculative markets.

His 1993 book, "Macro Markets: Creating Institutions for Managing Society's Largest Eco-non-tic Risks" (Oxford University Press) proposed a variety of new risk-management contracts, such as futures contracts in national incomes or in real estate, that would revolutionize the management of risks to standards of living. That book won the 1996 Paul A. Samuelson Award, TIAA-CREF.

His book "Irrational Exuberance" (Princeton University Press, 2000, Broadway Books 2001) is an analysis and explication of the stock market boom since 1982. It won the Commonfund Prize, 2000, and was a New York Times nonfiction bestseller.

Shiller is co-founder of Case Shiller Weiss, Inc. in Cambridge, Mass., an economics research and information firm, and a co-founder of Macro Securities Research LLC in Cambridge, which promotes securitization of unusual risks.

Shiller is working on a new book on America's next major economic challenges -- the development of robotics and business globalization.

In a recent interview, Shiller gave his opinions on several issues:

Q: Culturally speaking, what do you feel has been the biggest effect of the surging economy over the past several years on American society?

Shiller: "People spent too much over last five years as the stock market improved," said Dr. Shiller, "buying big ticket items like cars, homes and electronics. Meanwhile, savings rates actually became negative. Americans used to save close to ten percent of their net income, but not any more."

Q: With the recent downturn in the economy are people becoming more conservative again?

Shiller: "Unfortunately not," said Shiller, "People were so confident of the future ... that now they are in denial about it, and seem to be just hoping the good times return."

Q: Are there other indicators that we are in for harder times financially?

Shiller: "The other major money problem in American society is the growth of credit cards and credit card debt ... a large minority of the middle class are living on the edge of bankruptcy because of this."

Q: How do you feet our culture will change as the baby boomers retire?

Shiller: "We have a lot of Middle aged people who have been the most productive," according to Shiller. "Many people think current productivity growth is due to computers alone, but it's also the work force. Eventually productivity will decrease when baby boomers retire. There will be fewer folks to work and more need to care for the elderly."