Robert Shiller on Why So Many Experts Missed the Crash
In hindsight, the housing bubble and ensuing crash seem so obvious. Who could have missed it?
At the time, nearly everyone.
Despite the incredible leverage built up in financial institutions and blatant overbuilding in the housing market, the bubble and crash of 2008 surprised the majority of expert forecasters.
In an exclusive interview last month, I asked Yale economist Robert Shiller -- one of the few who warned of the housing bubble well before it burst -- where the economy is heading over the next 10 years. His response was essentially: No one knows. That moved into a conversation about why we're so bad at predicting what the economy and investments might do in the future. Here's what he had to say:
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