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Behavioral Economics and Institutional Innovation


  • Robert J. Shiller

    (Cowles Foundation and International Center for Finance, Yale University)


Behavioral economics has played a fundamental role historically in innovation in economic institutions even long before behavioral economics was recognized as a discipline. Examples from history, notably that of the invention of workers' compensation, illustrate this point. Though scholarly discussion develops over decades, actual innovation tends to occur episodically, particularly at times of economic crisis. Fortunately, some of the major professional societies, the Verein für Sozialpolitik, the American Economic Association, and their successors, have managed to keep a broad discourse going involving a variety of research methods, including some that may be described today as behavioral economics, thereby maintaining an environment friendly to institutional innovation. Further, the broad expansion of behavioral economics that is going on today can be expected to yield even more such important institutional innovations.

Suggested Citation

  • Robert J. Shiller, 2005. "Behavioral Economics and Institutional Innovation," Southern Economic Journal, Southern Economic Association, vol. 72(2), pages 269-283, October.
  • Handle: RePEc:sej:ancoec:v:72:2:y:2005:p:269-283

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    References listed on IDEAS

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    2. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
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    7. Vestin, David, 2000. "Price-level Targeting versus Inflation Targeting in a Forward-looking Model," Working Paper Series 106, Sveriges Riksbank (Central Bank of Sweden).
    8. Svensson, Lars E O, 1999. "Price-Level Targeting versus Inflation Targeting: A Free Lunch?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(3), pages 277-295, August.
    9. C Freedman, 2001. "Inflation Targeting And The Economy: Lessons From Canada'S First Decade," Contemporary Economic Policy, Western Economic Association International, vol. 19(1), pages 2-19, January.
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    Cited by:

    1. Bilal Kargi, 2014. "Credit Default Swap (Cds) Spreads: The Analysis Of Time Series For The Interaction With The Interest Rates And The Growth In Turkish Economy," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 10(1), pages 59-66.
    2. van Dalen, H.P. & Henkens, K. & Hershey, D.A., 2008. "Are Pension Savings sufficient? Perceptions and Expectations of American and Dutch Workers," Discussion Paper 2008-58, Tilburg University, Center for Economic Research.
    3. Martin Gold, 2010. "Fiduciary Finance," Books, Edward Elgar Publishing, number 13813.
    4. Schilirò, Daniele, 2012. "Bounded rationality: psychology, economics and the financial crisis," MPRA Paper 40280, University Library of Munich, Germany.
    5. Lunn, Pete & Bohacek, Marek & Somerville, Jason & Ni Choisdealbha, Aine & McGowan, Feidhlim, 2016. "PRICE Lab: An Investigation of Consumers’ Capabilities with Complex Products," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT306.
    6. Daniel B. Klein, 2006. "Sense and Sensibilities: Myrdal's Plea for Self-Disclosure and Some Disclosures on AEA Members," Econ Journal Watch, Econ Journal Watch, vol. 3(1), pages 180-205, January.

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    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology


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