Robert Shiller - How Human Psychology Drives the Economy

Daniel Finkelstein, comment editor, The Times joins acclaimed economist Robert Shiller who argues for an active government role in economic policymaking by recovering Keynes idea of animal spirits.

[@pieroa.rivasc.5378]

11:30 fairness 12:06 corruption 13:10 money illusion 13:45 stories (mind is organized around stories) 16:16 stories about winners 17:05 Question 1 18:45 Question 2 20:53 Question 3 24:59 Question 4

[@gmshadowtraders]

4:17 "Do we really know these probabilities? If you're starting a business how do you know it's going to succeed? If you're building a new railroad how do you know it's a good idea? It all comes down to some kind of intuitive judgement because NOBODY can tell you the probabilities [Wow]. Keynes thought this kind of intuitive judgement varies through time, and it brings us into bubbles when we get overly enthusiastic and then it reverses and we end up in busts when we are very unenthusiastic".

[@RD-rt8wr]

Wisdom

[@scottvska]

5:08 I'd like to hear Shiller explain why entrepreneurs believed that the economy was doing poorly. Why didn't the majority of businessmen believe that the economy was doing poorly in 1925? Entrepreneurs need some stimulus to believe that the economy is sound. If businesses are going bankrupt and people are getting laid off, it might be foolish to make investment purchases.

[@NoreenHoltzen]

Very few realize that nearly all the innovation came out of the state sector rather than the private markets. Take every component in your iPhone - if you go through then you’ll find the early hard and innovative work was always from the non-profit state, not from profit based sector: GPS, the silicon chip design (even Intel 4040 was for traffic lights funded by the state), the Von Neumann computer design (university salary funded), the modern programming languages (all minor variants of Algol 69, state funded), the inportant internet protcols (http, https, etc), the first web browser, touch screen technology.. or modern passenger planes being minor variants of state funded bombers.. all the really difficult early risky work where the real innovation was, came out out of the state sector, which didn’t require a profit mandate, and then handed over to the private sector for relatively trivial, far less innovative and risk, incremental and profitable work.