OpenMarkets

Shiller Has Added Understanding to Markets

Oct 11, 2012 || David Blitzer || No Comments

S&P Dow Jones Indices joins CME Group in congratulating Bob Shiller on the 2012 CME Group-MSRI Prize.

Bob Shiller, along with Professor Emeritus Chip Case of Wellesley College, developed a series of home price indices which culminated in the widely followed S&P/Case-Shiller Home Price Indices now published each month by S&P Dow Jones Indices.  The initial ten city indices and the composite index of the ten cities underlie futures and options contracts listed and traded on the CME.  Over the past few years of the housing collapse and global financial crisis, these indices have proved invaluable for financial analysts, investors and regulators measuring developments in housing and the impact of the housing collapse on the banking system.

Bob Shiller’s work to increase our understanding of financial markets and how individuals interact with financial markets and financial services has made major contributions. His analysis of market volatility and why dividend changes are not large enough to explain stock market volatility contributed to the development of some of S&P Dow Jones Indices equity indices over the years.

Shiller’s research in behavioral finance revealed how many investors view markets and different investment choices.  It added to the understanding of why investors should consider financial products based on indices rather than relying on only active management.  His most recent book, Finance and the Good Society should remind regulators and legislators that in the aftermath of the Great Recession we must understand the role of the financial sector lest the new rules leave us worse off than before.