Robert Shiller on Animal Spirits, Optimism, and Why the Economy Is Slow

If you're interested in bubbles, you probably know who Robert Shiller is. The Yale economist (and name behind the S&P Case-Shiller home price index) rose to fame pointing out the dot-com stock bubble in the late 1990s, and the more recent housing bubble long before most saw trouble brewing.

Some of Shiller's most interesting work has been on the psychology of how people interpret what's going on in the economy -- our confidence, pessimism, expectations, and outlooks. He calls them animal spirits.

I sat down with Professor Shiller recently for a wide-ranging talk about investments and the economy. I asked him why the economy is so slow, which eventually moved into a conversation about the psychological forces affecting us today. Have a look:

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