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Robert Shiller: Fear of robots is driving the market rally

Robert Shiller on artificial intelligence
Robert Shiller on artificial intelligence

Robert Shiller is well-known for his views on valuation, volatility, dividends and bubbles. But when asked what currently worries him most, the Yale professor of economics turned to another subject entirely.

"A theme that I have been coming back to is that the big worry that's on people's minds — I don't know how active it is in trading — but it's about where the world is going with automation and robotics," Shiller said in a Wednesday interview on CNBC's "Trading Nation."

Providing just one recent example of technological advancements pushing aside traditional human roles, the Nobel laureate cited the attempt by two Norwegian companies to develop a crewless container ship.

"We are going to see ships sailing across the ocean with nobody on it, just cargo — like driverless cars," Shiller said. "These things keep coming up and I think they make people worry about everything, including even stocks. You don't know how all this automation is going to play out for various kinds of companies. This is what, I imagine, is on people's minds all the time now."

In a Thursday interview on CNBC's "Halftime Report," Shiller added that these concerns may actually be spurring the stock market rally.

"It just seems like, it doesn't matter what job you have, there's always some robot out there about to take it," he said. "I think people are worried, and they want to buy tech, because they feel like they're taking part [in] the thing that's threatening them. So there is this deep emotional fear which is increasing, which is having the effect of pushing up prices for now."

This fear is "substantially driving the market," he said.

Indeed, the information technology sector is by far the top performer in the this year. And the best-performing large U.S. stocks include AI chipmaker Nvidia and self-driving pioneer Tesla; those shares have surged 49 percent and 55 percent year to date, respectively.

Meanwhile, the titans of technology are speaking openly about artificial intelligence concerns. Tesla CEO Elon Musk has memorably called AI "our biggest existential threat," and when Facebook CEO Mark Zuckerberg recently called his warnings "irresponsible," Musk retorted that Zuckerberg's "understanding of the subject is limited."

Facebook, like Tesla, has been a notable force in AI research — and a company whose shares have risen substantially this year.

For Shiller, the market move he sees as being partially driven by technological anxiety appears a bit irrational, but may not yet be over.

"I don't know that it's come to a culmination," he said Thursday. "It might go on for years like this."

The full post-Fed interview with Robert Shiller
The full post-Fed interview with Robert Shiller