Professor Hiller believes that everyone in modern economic life faces many real economic risks, such as slow economic growth, increased unemployment, rising inflation and even the decline of individual regions or industrial sectors. A database system that contains various risk information and can process this information in a timely manner forms the material basis of the new financial order. With the help of this super database, all transaction risks and various profit opportunities in the global market will be responded to in a timely manner, and new financial instruments will be created from then on. People then diversify and resolve these real economic risks by trading these new instruments in financial markets.
Professor Robert J. Shiller, who relied on fundamental analysis and accurately predicted the Internet bubble in his book "Irrational Exuberance", has recently conducted a unique analysis of major global stock markets. Through decades of historical data analysis, Professor Shiller found that the ratio of the total market capitalization of the stock market to the country's GDP is a good market valuation indicator: when the ratio is below 50, the market is significantly undervalued; when the ratio is between 50-75, The market is moderately undervalued; when the ratio is between 75 and 90, the market valuation is reasonable, and when the ratio is above 90, it is overvalued. The current market value of A-shares only accounts for 45.2% of last year’s GDP, which is significantly underestimated. Regarding the market’s expected rate of return, based on factors such as the growth rate of listed companies’ operating income, dividend levels, and changes in stock market valuations, the professor concluded that the expected rate of return of the Chinese stock market is 30.1! In addition to studying and writing books, Professor Schiller is also willing to apply his ideas into practice. As one of the founders, Professor Robert also co-founded Case Shiller Weiss, Inc. (Case Shiller Weiss, Inc.) with Mr. Allen Weiss. The company is located in Cambridge, Massachusetts, and is a company dedicated to research. A company that develops real estate price indexes and automated valuation models in the real estate market.
In 2002, the company was acquired by Fiserv and renamed Fiserv CSW. In 1999, he also established Macro Securities Research LLC with Mr. Alan Weiss, which has two subsidiaries, Macro Financial and Index Science, with the goal of promoting the securitization of unusual risks. .
Shiller has written extensively on financial markets, behavioral economics, macroeconomics, real estate, statistical methods, market moral judgment, and fair choice.
Market Volatility (Market Volatility, published by MIT) written in 1989 discusses in detail how to use a combination of mathematical analysis and behavioral analysis to face price fluctuations in the speculative market; 1993 Macro Markets: Creating Institutions for Managing Society's Largest Economic Risks (Cambridge University Press), written in 2001, proposed a variety of new risk management contracts, such as national income or Real estate futures contracts, which will lead a new revolution in the field of risk management that adapts to modern people's living standards. This book won the 1996 Teachers Insurance and Annuity Association-College Retirement Securities Fund (TIAA-CREF) Samuelson Award ; Another book, "Irrational Exuberance" (Irrational Exuberance, published by Princeton University Press in 2000 and Broadway Books in 2001), which he is most familiar to Chinese people, introduces and analyzes the relevant content of the speculative bubble, and analyzes the 1982 It has paid special attention to the securities and real estate markets since 2000, and won the 2000 Commonfund Award. It was named the best-selling non-science fiction book by the New York Times and was published in fifteen languages ??in 2005. The second edition of the book.
In the late 1990s, the U.S. stock market showed unprecedented prosperity stimulated by the new economic myth. Stimulated by investors' rising investment enthusiasm, the Dow Jones Index, S&P 500 Index and Nasdaq Index in the U.S. stock market continue to hit record highs. As an economist, Professor Shiller used his keen insight to discover the crisis hidden behind this apparent prosperity.
In 2000, Professor Shiller launched a new book for general readers - "Irrational Exuberance" (Irrational Exuberance), published by Princeton University Press in 2000, with a Chinese translation in April 2001 Published by Renmin University of China Press).
In this book, Professor Shiller compares the changes in the price-to-earnings ratio (P/E) of the U.S. stock market over the past 140 years, pointing out that in the late 1990s, the U.S. stock market index rose sharply It is an abnormal phenomenon that is divorced from the actual economic operation. He further analyzed the reasons for this in detail. However, just as this book came out, a huge earthquake occurred in the U.S. stock market. In early March 2000, the Dow Jones Index fell by nearly 20 points from its all-time high of 11,700 points in just a few weeks. At the same time, the Nasdaq Index also fell by nearly 20 points. It suffered a heavy blow, falling from 5078 points on March 24, 2000 to 3227 points on April 17, a drop of more than 30%.
At this time, the public's interest in "Irrational Exuberance" increased greatly and they rushed to buy it. At the same time, media such as "Business Week", "The New Yorker", "The New York Times" and "Financial Times" also praised the book and published positive reviews. This book was also named the best-selling non-fiction book of the year by the New York Times. The author, Professor Hiller, has become the darling of the media. In just two weeks, he frequently appeared on the top financial programs of CNN, ABC, PBC and other TV networks. There is also a little-known story about the origin of the title of this book: In December 1996, Professor Shiller and a colleague reported their pessimism about the stock market to the then Chairman of the Federal Reserve, Alan Greenspan. expected. Two days later, Greenspan used the term "irrational expectations" for the first time in his famous speech that attracted widespread attention to express his concerns about the stock market conditions at the time.
After the success of "Irrational Exuberance", Shiller began to focus on a more macro and complex issue-that is, where should finance go in the 21st century? develop? Professor Shiller gives his answer to this question in his forthcoming book, "The New Financial Order: Risks in the Twenty-First Century." In the book, Professor Shiller first warned the world: There is excessive superstition about the stock market in the current society, and everyone is dreaming of making wealth through the stock market. However, this excessive superstition of the stock market only contributes to the instability of the financial system. This book mainly analyzes the extensive impact of finance, insurance, and public finance on our future lives. It was published twice by Princeton University Press in 2003 and 2004 in eight languages.
Shiller's warning contains a meaning that is often ignored by the world - that is, the stock market is unstable, and the rise and fall of stock prices determines that it is impossible for people to obtain stable benefits from it; At the same time, because the stock market has attracted too much attention from people, people inevitably lack the necessary attention to some factors in the real economy, such as the income our human capital brings to us or the real estate we own. income etc. These factors all belong to the category of the real economy and have a more profound impact on our quality of life. As the process of economic globalization continues to deepen, the risks faced by these real economic factors are increasing sharply at an unprecedented rate. Through "The New Financial Order: Risks in the Twenty-First Century," Robert Shiller uses his foresight to provide us with prescriptions for defusing the risks of these real economic factors.
In fact, every member of society may become a victim of these economic uncertainties. These real economic risks can affect our jobs, our homes, our communities and even our entire national economy.
However, our current financial system arrangement (we can also call it the financial order) is almost powerless against these risks, so he proposed six solutions to use modern information technology and advanced financial theory To resolve these real economic risks and build a new financial order in the 21st century. In Professor Shiller's vision, a database system that contains various risk information and can process this information in a timely manner forms the material basis of the new financial order. With the help of this super-powerful database system, all transaction risks and various profit opportunities in the global market will be responded to in a timely manner, and new financial instruments will be created from then on. Then, people diversify and resolve these real economic risks by trading these new financial instruments in the financial market.
Professor Hiller’s idea is similar to insurance. Both of them allow more people to jointly bear risks through financial transactions. However, the risks that Professor Hiller wants to resolve are all current risks. areas that the insurance industry is afraid to venture into. This bold idea may seem unbelievable, but don’t forget that a century ago, didn’t people at that time also sneer at the idea of ??property insurance and life insurance?
This book has also received unanimous praise from the economics theoretical community. Professor Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics, praised this book as "undoubtedly an important contribution in this important field." The most important work", the famous American columnist Bede Bernstein was full of praise for Professor Shiller's economic skills and extraordinary foresight displayed in the book.
However, the most enlightening comment comes from another Nobel Prize winner in economics, George Akerlof. "In "The New Financial Order", he (Professor Shiller) Tell us how the new financial order improves the situation of everyone, whether rich, middle class or poor, by reducing uncertainty in the economy. In this sense, they can enjoy the benefits of the new financial order. "Finance and the Good Society" is Robert Shiller's latest book, which can be said to be Robert Shiller's masterpiece. do. CEO, investment manager, banker, investment banker, lender, trader, market maker, underwriter, market designer, financial engineer, derivatives provider, lawyer, financial advisor, lobbyist, regulator, Accountants, corporate commodity financiers, policymakers, these roles you know or don't know will all be described in Shiller's book - you can have a thorough understanding of what finance is all about. . This book is neither a hymn to the financial world nor a denunciation of the ills of finance. Rather, it puts finance in the context of society, with its own objective commentary on its merits and demerits.
In addition to studying and writing books, Professor Hiller is also willing to apply his ideas into practice. He is currently one of the founders of Case Shiller Weiss, Inc., a company located in Cambridge, Massachusetts, USA, which specializes in economics research and information work; it is also a co-founder of Macro Securities Research Co., Ltd. Co-founder of Macro Securities Research LLC, a Cambridge, Massachusetts-based company that promotes the securitization of unusual risks.