Animal Spirits

Review Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism

by GEORGE A. AKERLOF and ROBERT J. SHILLER

Description

A truth that the book stands by The Global Financial Crisis of 2008 makes it apparent that Psychological Forces are at work in pushing the wealth of nations into the edge. The authors, George Akerlof and Robert Shiller go against the grain by defying what is widely accepted as “economic wisdom,” attempting to rectify the chaotic result that fostered the present condition of the world market.

The authors stand by the claim that reliable governance is needed in policymaking for a nation’s economy. This is achieved through the recovery of what is called “animal spirits.” This is a concept by John Maynard Keynes that goes to describe the despondence eventually driving the Great Depression and the psychological forces that shaped the American economy’s recovery. What the authors drive at is that the government is given merit in keeping these animal spirits at bay.  This Keynesian approach allows for the rebuilding of a sturdier economy.

Readers agree that the book should be treated as a roadmap for rescuing oneself from financial misfortunes. Through the material, leaders would be able to channel “animal spirits.” Regardless, the book goes through lengths in illustrating the reason why some economic problems still thrive even after the action had already been taken.

About the Authors

A Professor of Economics from the University of California, Berkeley, George Akerlof, is a recipient of 2001’s Nobel Laureate in Economics. Along with Robert Shiller, he wrongs the book, “Animal Spirits.”

Table of Contents

• Preface to the Paperback Edition
• Preface
• Acknowledgements
• Introduction
  • Part One – Animal Spirits
    1. Confidence and Its Multipliers
    2. Fairness
    3. Corruption and Bad Faith
    4. Money Illusion
    5. Stories
  • Part Two – Eight Questions and Their Answers

1. Why Do Economies Fall into Depression?
2. Why Do Central Bankers Have Power over the Economy (Insofar as They Do?)
3. Why Are There People Who Cannot Find a Job?
4. Why is There a Trade-Off between Inflation and Unemployment in the Long Run?
5. Why Is Saving for the Future so Arbitrary?
6. Why Are Financial Prices and Corporate Investments So Volatile?
7. Why Do Real Estate Markets Go Through Cycles?
8. Why is There Special Poverty among Minorities?
9. Conclusion

• Notes
• References
• Index