Animal Spirits by George A. Akerlof

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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. In a new preface, they describe why our economic troubles may linger for some time--unless we are prepared to take further, decisive action.


About George A. Akerlof

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George A. Akerlof is the Daniel E. Koshland Sr. Distinguished Professor of Economics at the University of California, Berkeley. He was awarded the 2001 Nobel Prize in economics. Robert J. Shiller is the best-selling author of "Irrational Exuberance" and "The Subprime Solution" (both Princeton). He is the Arthur M. Okun Professor of Economics at Yale University.
Published February 1, 2010 by Princeton University Press. 254 pages
Genres: Business & Economics, Political & Social Sciences, Professional & Technical, Literature & Fiction. Non-fiction

Unrated Critic Reviews for Animal Spirits

The New York Times

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Two economists argue that human emotions cause booms and busts, and advocate for broader, more permanent, more disciplinary regulation.

Apr 19 2009 | Read Full Review of Animal Spirits

BC Books

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The importance of confidence, fairness, corruption, money illusion and stories in our understanding of economics.

Dec 26 2009 | Read Full Review of Animal Spirits

Daily Kos

Gramm's law then - bad in and of itself - was made worse by not having any safeguards to address rather obvious outcomes.

Mar 15 2009 | Read Full Review of Animal Spirits

Seeking Alpha

In attempting to answer some large fundamental economic questions by calling attention to psychological influences, the book offers a first glimpse of what economic solutions might look like in the future.

Jun 04 2009 | Read Full Review of Animal Spirits

The Finance Professional's Post

Thomas Gresham’s insight that “bad money drives out good money” is crucial to this book, but the authors build on their own previous work as well, particularly Akerlof’s 1970 paper “The Market for Lemons: Quality Uncertainty and the Market Mechanism” (one of the most cited papers in economic theo...

Apr 16 2010 | Read Full Review of Animal Spirits

Beyond Brics (Finanical Times)

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In their new book, two of the most creative and respected economic thinkers currently at work, George Akerlof and Robert Shiller, argue that the key is to recover Keynes’s insight about “animal spirits” – the attitudes and ideas that guide economic action.

Feb 17 2009 | Read Full Review of Animal Spirits

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