The Importance of Psychology in Bubbles

Edward Shan was our Bob Schiller in the 1930s until he's on timely death in 1935. He fell out of his office window at the University of Adelaide. But it's interesting that the difference between those two leading economists, one in Australia, who remembered what a real estate mediated financial crisis was like and could warn people during the 20s. One in America had no memory, no personal memory of what one was like, and was incredibly optimistic by comparison. It just points to this idea of the collective memory and the importance of psychology in bubbles.

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