Interview with 2013 Laureate in Economic Sciences Robert J. Shiller, 6 December 2013.
Could you please explain your Prize awarded work for 13-14-year olds?
Robert J. Shiller: I was part of a three-man award. It’s a little hard because I think that the descriptions they might give will be different than mine, so I have to speak for all three of us. I think it has something to do … it’s hard for a thirteen-year-old, well, a thirteen or a fourteen-year-old would know about something called the stock market or the housing market. We have done work on understanding what drives these markets and why do they move through time, what patterns can you expect them to show? Looking at from my perspective I was always among the three of us the one that was most sceptical about rationality of human behaviour. Basically, these markets can go crazy sometimes and that was my view and it coloured the kind of work that I did. I don’t know that I proved that markets go crazy, but I think that the evidence that I showed inclines really in that direction.
What were you doing when you got the message of being awarded the Prize?
Robert J. Shiller: I was getting out of the shower at home, I was dripping and the phone called and I was thinking, maybe I just won’t answer that, but then I thought, I had a suspicion I did answer it and it was quite a surprise. Then I woke my wife up and I said, I apologized to her, I said: “I don’t know if I should wake you for this but I just won the Nobel Prize” and she said: You are kidding!”. I had people telling me that I might win it, but they are friends of mine, so I then decided I will ask other economists, well-known economists: “Do you have friends telling you that you are going to win the Nobel Prize?” and they always said: “Yes”, so I figured it meant nothing that I have friends telling me that.
What brought you to Economic Sciences?
Robert J. Shiller: When I was a child, I thought I wanted to be a scientist, I could have been in chemistry or physics or medicine. At some point in my college years I decided to switch to economics when I was in a junior in college. Why did I make the switch? I don’t exactly know. What struck me is that the choices young people have make about careers, there is so many things you can do, but you are expected to commit at a very early age to one line or another. I think it is part of the tragedies of ordinary living that you have do that. I would love to be all of those things, a chemist, a physicist, the medical researcher and how about a writer as well, but in reality you can’t do all of those things and you never know, you make a choice in life, you never know at the end whether it was correct.
Have you ever had an eureka moment?
Robert J. Shiller: There were times in my research that I thought that I might have something important and I don’t think that I was thinking I would win the Nobel Prize for it though.
Robert J. Shiller: Thinking about the importance of my work and especially in preparing for my Nobel Lecture I am struck at how many different people did important work and often they are forgotten, not completely forgotten, but largely forgotten. I am inclined to reflect that the Nobel Prize is quite a rare event. It is not enough to do good work, it has to somehow be really highly regarded. I just feel that there are so many other people who are highly deserving, I feel humbled by the thought of that.
Who is your role model, and why?
Robert J. Shiller: At various times in my upbringing and in my carrier I have had role models that inspired me. It goes back to my high-school math teacher who inspired me to think that I could do mathematics and then in college I had a professor who was combining psychology and economics. I thought that is really solid, it sounded very real to me. Then in graduate school I had an adviser who connected me, made my economic work connected to real problems in the world and then over the years I have had others, there are lots. My wife has been an inspiration to me too, my wife is a psychologist and that has helped mould my thinking.
What is the importance of the Nobel Prize?
Robert J. Shiller: What I like about the Nobel Prize … I was thinking of all the prizes that are given out, a lot of them are related to sports, the arts and often like movies. What strikes me as unique about the Nobel Prize is that it’s really high-minded, that’s why I am feeling very honoured to get it, but it’s for people who are contributing to our intellectual capital in the world. I particularly like the idea that we have a prize in chemistry. I am not a chemist, so I have no reason to say this, but I think we don’t give enough attention to our chemists. They are really important, and I just so much admire what they do. I am glad that somebody has this award for them and for the other scientist as well.
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Their work and discoveries range from the Earth’s climate and our sense of touch to efforts to safeguard freedom of expression.
See them all presented here.