Shiller: Recovery tied to confidence, not stimulus

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Robert Shiller isn’t sure that the economic recovery is anything more than a “spontaneous recovery of confidence,” he said in a CNN interview with Fareed Zakaria yesterday. The Yale professor and economist behind the Case-Shiller Index said the government’s stimulus may not have been large enough on its own to fuel the increase in housing prices that we’re seeing. He said he doesn’t know exactly what the source of this recovery is, but that it could be renewed confidence in the government’s ability to react at all, rather than the government’s actual actions. He added that the disparity between rich and poor Americans is not sustainable without creating a “winner-take-all” economic system that will inevitably result in resentment and hostility.

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