Macro Markets

In Macro Markets, Robert Shiller proposes transformative financial markets to address major economic risks, aiming to reduce volatility and income inequality.

In Macro Markets, Robert Shiller presents a compelling vision for innovative financial markets aimed at mitigating significant economic risks that governments face. He critiques the existing financial systems, arguing that they are insufficient for addressing the complexities of modern economic challenges. By proposing new markets, Shiller believes that we can fundamentally transform the way risks are managed, potentially reducing both economic volatility and income inequality on a global scale.

The book delves into the nature of risks that individuals and societies encounter, highlighting that while certain risks, like natural disasters, are collective, many are borne by individuals, often dictated by chance. Shiller explores the potential of new market technologies to facilitate better risk-sharing among individuals, detailing how new contracts could be structured to safeguard living standards against various uncertainties. His proposals include international markets for perpetual claims on national incomes, which could surpass traditional stock markets in significance and scale.

Furthermore, Macro Markets tackles the technical challenges of establishing these new markets, offering solutions such as futures markets on perpetual income claims and cash settlement index numbers for risk management contracts. Shiller's innovative ideas could reshape the landscape of economic risk management, fostering stability and equity in a world increasingly defined by financial uncertainty.