Excellent conversation with Robert Shiller at The McKinsey Quarterly "Surveying the economic horizon: A conversation with Robert Shiller" here. The quarterly's email states, "Robert Shiller, a professor at Yale University and cocreator of the Case–Shiller Home Price Index, discusses four aspects of the current crisis: regulating for financial innovation, reducing trust in models, redesigning institutions, and the time line for turnaround. His perspectives are informed in part through his research that psychology—particularly an understanding of human irrationality—can play a key role in explaining economic breakdowns and exploring effective solutions."
On innovation, Robert Schiller states:
"I don’t want to see us killing off innovation, and this is what may get lost—and I hope it doesn’t get lost—in the current crisis. Ultimately, let’s not forget that we’ve learned lessons that a capitalist economy is an economy that promotes entrepreneurship, and entrepreneurship is not the province for government bureaucrats."
On the possibility of an economic turn around:
"I don’t want to say that I don’t think there will be a turnaround soon, but I think that many of us are too much expecting that it might come tomorrow or the day after. And this volatility is evidence of that. So I think it is quite possible that the stock market and the housing market, five years from now, will be close to where they are now."