What's A Bubble? (Classic)

Planet Money

NPR

Business, News

4.6 • 29.8K Ratings

🗓️ 1 July 2021

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

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Summary

Can you tell if the economy is in a bubble? How? And why do bubbles happen? Robert Shiller and Eugene Fama shared the economics Nobel back in 2013 despite fundamentally disagreeing over the meaning of a bubble. | Subscribe to our weekly newsletter here.

Transcript

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0:00.0	This is Planet Money from NPR.
0:03.0	The US stock market hit a record high this week.
0:09.5	Home prices are going through the roof.
0:11.8	And I'm not saying that we're in a stock market bubble or in a housing bubble.
0:16.2	I'm not saying that prices are absurdly high and are inevitably bound to come crashing
0:21.2	down.
0:22.7	But it does seem like a good time to run a show that we did back in 2013.
0:29.8	In two economists, Eugene Pharma and Robert Schiller won the Nobel Prize in Economics for
0:35.2	their work on bubbles.
0:37.8	These two economists were really a pretty unlikely pair to share the prize because intellectually
0:45.0	they kind of come from different universes.
0:48.1	When people heard their names announced together, people said, really, Schiller and Pharma,
0:54.0	Schiller himself had a similar reaction.
0:57.0	That was a complete surprise.
0:58.8	I hadn't thought that that would happen.
1:00.7	He and I seem to have very different views.
1:03.7	It's like we're a different religions, you know?
1:05.7	It's a certain assumptions that basic assumptions are different.
1:10.4	Hello and welcome to Planet Money.
1:12.4	Today on the show, a philosophical question.
1:15.6	Are we ruled by our heads or by our hearts?
1:18.7	Are we logical creatures responding rationally to rewards and punishments?
	...

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