Shiller: Weak Corporate Investment Signals 'Loss of Animal Spirits'

Many economists have noted the reluctance of corporations to invest in their operations over the past few years, and that reluctance indicates a confidence problem, says Nobel laureate economist Robert Shiller of Yale University.

"It's amazing how lackluster investment is at this point in history, and it's a sign of some loss of animal spirits," Shiller tells CNBC. Legendary economist John Maynard Keynes created the term "animal spirits" to describe the eagerness of consumers and business to invest and spend.

"There's definitely a nervousness, because it's not only low investment, it's at almost record low interest rates," Shiller notes.

Indeed, record low government bond yields in countries across the globe — which includes 30-year U.S. Treasurys — point to a loss of confidence by investors too, says Harvard economist Ken Rogoff.

"I think there is still a lot of residual nervousness after the financial crisis, what's going to happen next. I think there's still a big overhang. It takes a long time to fade," he tells CNBC.

"People are losing faith in the central bank's [Federal Reserve] ability to create inflation again."

Shiller is worried bubbles could burst in both the stock and bond markets. The S&P 500 index stands 3 percent below its Dec. 29 record high.

Nobel laureate economist Joseph Stiglitz of Columbia University says policy is the problem.

"The near-global stagnation witnessed in 2014 is man-made. It is the result of politics and policies in several major economies — politics and policies that choked off demand," Nobel laureate economist Joseph Stiglitz of Columbia University writes in an article for Project Syndicate.

"In the absence of demand, investment and jobs will fail to materialize. It is that simple."

So how to create demand? "The private sector — even with the generous support of monetary authorities — will not supply it. But fiscal policy can," Stiglitz writes. "The big problem facing the world in 2015 is not economic. The problem is our stupid politics."

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