Did Greenspan Steal the Phrase “Irrational Exuberance?”

Interesting discussion by Think Tank contributor MacroMan, who retells a story about Yale Professor Robert Shiller:

We asked him once  to visit us in our offices and the meeting took place the day after then Fed Chairman Alan Greenspan’s famous Irrational Exuberance speech in December 1996:

But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

The professor said he was in town to meet with Greenspan who was concerned about the run-up in stock prices. During the meeting Greenspan solicited his thoughts on why stocks were rising.  The professor answered maybe it was just “irrational exuberance” among investors. Hmmmm…

The Ambiguity of Stock Value,  December 27, 2010

In other words, Greenspan cribbed Shiller’s phrase for his speech!

Perhaps this explains why Shiller named his book “Irrational Exuberance” — he was taking back the phrase from Greenspan as his own.

Fascinating stuff . . .


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