I have a better interpretation

Tales of the Economy

While economic textbooks have long relied on a utility-maximization model of economic decision-making, Robert J. Shiller and other behavioral economists continue to demonstrate that human behavior is not so simple. The stories we use to frame our thinking and guide our actions might not always make sense, but they play a crucial role nonetheless.

Shiller calls it herd behavior, I call it rescaling.  Economists got stuck on constant returns to scale, they are the one making up narratives, not the traders.

Consider the small state problem:
The long term problem of small states going extinct will look to Shiller like a sudden herd behavior. It will not be, it will be the long expected shutdown of the Senate as it does its 200 year rescaling schedule.

And the monetary cycle is well established in history. Again it will look like a herd to Schiller.

Barry Eichengreen (and Schiller)  are mostly shifting blame from the economists to the trader. Barry has priors.