Brad revisits "irrational exuberance"

I normally don't cite posts by Brad DeLong because I figure everyone reads his weblog anyway. But f you are one of the few who don't, then skip over now to read Musings on Assessing "Irrational Exuberance". Almost a decade ago John Campbell and Robert Shiller* concluded that the American stock market was overvalued, and forecast it would be lower in January 2006 than January 1996. A plausible argument, which even persuaded Alan Greenspan. But they were wrong. Brad explains why...

* Later published as Campbell, John Y., and Robert J. Shiller, "Stock Prices, Earnings, and Expected Dividends", Journal of Finance, 43(3): 661-76, July 1988

Comments

[Brad DeLong]

I'm not sure I "explain" why. I think that all I do is muse...

[Gabriel Mihalache]

I haven't been following that site, but if you recommend it...