Robert Shiller On Academia's Obsession With EMT [PREVIEW]VW Staff
Beginning tomorrow, Friday, February 21 at 7:30 p.m. on public television (check local listings**) and on wealthtrack.com, Consuelo Mack WealthTrack features an in-depth interview with “Financial Thought Leader” Robert Shiller, winner of 2013’s Nobel Prize in Economic Sciences. The Yale University professor, economist, and author (Finance and the Good Society), discusses the importance of psychology in the markets and what it’s telling him now. You may recall that Shillerpredicted the bursting of the tech and housing bubbles. Anchor and Executive Producer Consuelo Mack also has Shiller discuss some topics he rarely speaks about.
Here’s a preview of tomorrow’s interview:
Robert Shiller explains why economics is not an exact science:
“Economic forecasting is very different from, say, forecasting the weather or forecasting sunspots or whatever, because people can just change their mind to defy you. People are smart and they have feelings. Economics is usually some kind of story that we tell that we think approximates reality, but we can get carried away with our stories…”
Robert Shiller explains why financial academia is so wedded to the efficient market theory and he is not:
Shiller: “For several reasons: One of them is economic theory thrives on the assumption that people are rational, because there’s some core theory about scarcity of resources and technology and marginal costs. It all fits into a rational story. You start bringing in psychology, it’s just kind of messed up. When I first started teaching, someone said, “Present a nice elegant lecture, and don’t say ‘on the other hand’ too much. The students don’t like that and, by the way, the incentive in academia is to get good student evaluations, and that will even go into your tenure decision. So don’t confuse them. Right? We’re the econ department. They didn’t come to hear psychology.” Anyway, that’s part of the story in academia. Another part of the story, I suspect, is sour grapes. We’re not making a lot of money (laughs), and so we conclude that it’s not possible to do that.”
Consuelo Mack: “And so, Bob, how did you overcome that?”
Shiller: “Well, I’ve just never been someone who fits in well with the crowd. I’ve always been skeptical. Maybe it’s because I took psychology and sociology courses. I married a psychologist, too. I hear other views, and I always thought that in any profession this is what psychologists called ethnocentricity. That goes back to William Graham Sumner, a 19th century sociologist/economist. They used to be the same thing in those days. So you develop a connection with another group, say, a department in the university, and you develop a “we’re right and they’re wrong” attitude. It’s just human nature.”
“Financial Thought Leader” Robert Shiller has been a regular guest on Consuelo Mack WealthTrack. Watch Shiller’s last appearance from March 2013, in which he shared his views and advice on the stock, bond and housing markets: http://wealthtrack.com/season-09/robert-shiller-2/. Watch his WealthTrack interviews from 2011, 2010 & 2009: http://wealthtrack.com/season-09/robert-shiller-pledge/
**Local market airdates and more info on Consuelo Mack WealthTrack are below.
About Consuelo Mack WealthTrack
New episodes premiere every week nationwide on public television (check local listings)
**New York metro area: Fridays at 7:30 p.m. on WLIW21, Saturdays at 8 a.m. on THIRTEEN and Sundays at 10:30 a.m. on NJTV
**Los Angeles area: Saturdays at 8 a.m. on PBS SoCal WORLD, Sundays at 3:30 p.m. on KLCS, and Tuesdays at 11:30pm on KVCRDT3 Desert Cities