4plex, I’ve followed a lot of Shiller’s work (on other subjects too) for several years now, and I agree that something happened around the time those CME housing futures based on his index first were launched.
It could be legal liability related to his role in the index that’s making him generally cautious, and anxious not to say clearly when he thinks house prices need to decline more than the PPT consensus. But I think it’s more than that. In the YouTube debate TG linked to here, Shiller is not so much trying to appear neutral on the outlook for future home prices as he is advocating a bigger role for government action to support house prices. He doesn’t have to do the second to avoid legal liability.
I think what’s happened to Shiller is that he became very tired of proposing, for 20 years, a lot of interesting new types of insurance, with no one picking them up. He probably began to realize that he could end his acadamic career with a pile of ideas, every last one of which was just collecting dust. Now that the housing futures are in place, he realizes he’s inside the tent with all the people who make things happen, and he desperately wants to make sure he’s not kicked out. He has lots of other ideas besides the housing futures that he wants to make happen.
To a significant extent, he’s been co-opted, and what he says has to be taken with big chunks of salt. Pity.
