A central tool in Shiller's work is the , which compares current stock prices to their average inflation-adjusted earnings over the past ten years.
: The ratio highlighted extreme valuations during the 1929 and 1999 peaks. Irrational Exuberance 3rd edition
Shiller’s work is a cornerstone of behavioral finance, emphasizing that investors are not always the "rational actors" assumed by traditional economic models. Irrational Exuberance: Revised and Expanded Third Edition A central tool in Shiller's work is the