Robert Shiller

CAPE compares a stock-market price index with average inflation-adjusted earnings over the previous 10 years. Shiller popularized it as a long-horizon valuation measure, but it is not designed to predict the market's next short-term move.

Shiller shared the prize with Eugene Fama and Lars Peter Hansen for empirical analysis of asset prices. Shiller's evidence showed that stock prices fluctuate more than could easily be explained by subsequent dividends.

Published in 2000, Irrational Exuberance examined speculative feedback, investor psychology, and elevated stock valuations near the dot-com peak. Later editions expanded the discussion to housing and other asset markets.

Fama's work emphasizes how difficult it is to beat markets using available information, while Shiller stresses excess volatility and psychologically driven price swings. Their joint 2013 Nobel highlighted that these findings address different aspects and horizons of asset pricing.