A CFA Institute article offers insights from Nobel laureate Robert Shiller on current market conditions and what lies ahead.

Here are some highlights from Shiller’s comments:

• Both the stock market and housing boom “show signs of disruption right now, which is a little unusual as these two markets are not very correlated with each other on a historical basis.
• On whether we’re in a bubble, Shiller says the question seems vague but also indicated an “improved enlightenment” among people.  “We’re always in a bubble somewhere,” Shiller says.
• Economists, he says, want to “standardize the understanding of economic events” into a simple model, but it’s “hard to standardize our understanding because ideas change and people’s thinking changes through time.”
• Trump’s trade tariffs, says Shiller, don’t carry the same weight as did some earlier in our country’s history (he cites the Smoot-Hawley Tariff during the Great Depression). He argues, “it’s something that’s more affecting our thinking than our actual economic constraints.”
• Shiller discusses his upcoming book, Narrative Economics, explaining that he addresses a convergence of the social sciences: “Economists see themselves as trained in economics and are reluctant to get involved in sociology, psychology, anthropology, or history.” The theme of his book, he says, is that “there are new ways of thinking that are encouraged by stories that people tell.”
• Recessions, says Shiller, don’t follow a “fixed timing or follow the interval of other cycles. But they do seem to come with some regularity.” The longest expansion in the U.S. he notes, lasted for 10 years (in the 1990s to early 2000s). “I don’t think it’s without merit to say that a cycle is overdue, but it’s weak.”