(With George A. Akerloﬀ) The global ﬁnancial crisis has made it painfully clear that powerful psychological forces are imperiling the wealth of nations today. From blind faith in ever-rising housing prices to plummeting conﬁdence in capital markets, “animal spirits” are driving ﬁnancial events worldwide. In this book, acclaimed economists George Akerlof and Robert Shiller challenge the economic wisdom that got us into this mess, and put forward a bold new vision that will transform economics and restore prosperity.
Akerlof and Shiller reassert the necessity of an active government role in economic policymaking by recovering the idea of animal spirits, a term John Maynard Keynes used to describe the gloom and despondence that led to the Great Depression and the changing psychology that accompanied recovery. Like Keynes, Akerlof and Shiller know that managing these animal spirits requires the steady hand of government — simply allowing markets to work won’t do it. In rebuilding the case for a more robust, behaviorally informed Keynesianism, they detail the most pervasive eﬀects of animal spirits in contemporary economic life — such as conﬁdence, fear, bad faith, corruption, a concern for fairness, and the stories we tell ourselves about our economic fortunes — and show how Reaganomics, Thatcherism, and the rational expectations revolution failed to account for them.
Animal Spirits oﬀers a road map for reversing the ﬁnancial misfortunes besetting us today. Read it and learn how leaders can channel animal spirits–the powerful forces of human psychology that are afoot in the world economy today.
Paperback: Princeton University Press | February 2010 | 069114592X & 978-0691145921