Robert Shiller on the housing boom/bust

Robert Shiller considers causes of the recent housing boom, and possible bust.

In this paper, I will consider, from a broad perspective, the possible causes of this boom, with particular attention to speculative thinking among investors. I will argue that a significant factor in this boom was a widespread perception that houses are a great investment, and the boom psychology that helped spread such thinking. In arguing this, I will make some reliance on the emerging field of behavioral economics. This field has appeared in the last two decades as a reaction against the strong prejudice in the academic profession against those who interpret price behavior as having a psychological component. The profession had come to regard all markets as efficient, and to reject those who say otherwise. Now, however, behavioral economics is increasingly recognized, and has developed a substantial accumulation of literature that we can use to give new concreteness to ideas about psychology in economics.


Paul Graham writes on Why to Not Not Start a Startup. Given his success with supporting projects at Y Combinator, his perspective is valuable. His essay presents a case against reasons that he has heard for not creating a startup company.

So here’s the brief recipe for getting startup ideas. Find something that’s missing in your own life, and supply that need—no matter how specific to you it seems. Steve Wozniak built himself a computer; who knew so many other people would want them? A need that’s narrow but genuine is a better starting point that one that’s broad but hypothetical. So even if the problem is simply that you don’t have a date on saturday night, if you can think of a way to fix that by writing software, you’re onto something, because a lot of other people have the same problem.


We’re going to use trac in conjunction with subversion to manage the code for our PowerSchool deployment project. The ticket system in trac looks decent. I’m not so sure about “milestones” — my one attempt to edit a milestone ran into trouble when I entered the date value wrong and fixing that value required entering all the milestone’s fields from scratch. I either screwed up, or the interaction design of that part of trac is poor.