Animal Spirits

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.

ISBN 0691142335   Pages 264 ISBN13 9780691142333 (What's this?)   Volumes 1 Publisher The University Press Group Ltd   Weight (grammes) 514 Imprint Princeton University Press   Published in New Jersey Format Hardback   Height (mm) 229 Publication date 29 Jan 2009   Width (mm) 152 Library of Congress 2008052649   Spine width (mm) 24 DEWEY 330.122019   Academic level General, Professional / Scholarly DEWEY edition DC22   Alternative ISBN 9781441816658

		Introduction		1
Pt. 1		Animal Spirits
1		Confidence and Its Multipliers		11
2		Fairness		19
3		Corruption and Bad Faith		26
4		Money Illusion		41
5		Stories		51
Pt. 2		Eight Questions and Their Answers
6		Why Do Economies Fall into Depression?		59
7		Why Do Central Bankers Have Power over the Economy (Insofar as They Do)?		74
		Postscript to Chapter Seven: The Current Financial Crisis: What Is to Be Done?		86
8		Why Are There People Who Cannot Find a Job?		97
9		Why Is There a Trade-off between Inflation and Unemployment in the Long Run?		107
10		Why Is Saving for the Future So Arbitrary?		116
11		Why Are Financial Prices and Corporate Investments So Volatile?		131
12		Why Do Real Estate Markets Go through Cycles?		149
13		Why Is There Special Poverty among Minorities?		157
14		Conclusion		167
		Notes		177
		References		199
		Index		219

Akerlof and Shiller are the first to try to rework economic theory for our times. The effort itself makes their book a milestone... And their book takes their case not just to economists, but also to the general reader. It is short (176 pages of text) and easy enough for laymen to understand. -- Louis Uchitelle, New York Times Book Review There is barely a page of Animal Spirits without a fascinating fact or insight. -- John Lanchester, New Yorker Akerlof and Shiller succeed, too, in demonstrating that conventional macroeconomic analyses often fail because they omit not just readily observable facts like unemployment and institutions such as credit markets but also harder-to-document behavioral patterns that fall within the authors' notion of 'animal spirits.' Confidence plainly matters, and so does the absence of it. When the public mood swings from exuberance to anxiety, or even fear, the effect on asset prices as well as on economic activity outside the financial sector can be large. -- Benjamin M. Friedman, New York Review of Books Animal Spirits [is] ... the new must-read in Obamaworld. -- Michael Grunwald, Time [Animal Spirits] really applies to all the big areas where we need change. -- er Orszag, Obama budget director (quoted from "Time White House Budget Director Peter Orszag is a numbers guy, a propeller head as President Obama would say. But as David Von Drehle and I write in this week's print version of Time, Orszag has been spending his time recently reading not about spreadsheets, but about psychology. In particular, he has been reading a new book by the economists George Akerlof and Robert Shiller called Animal Spirits: How Human Psychology Drives The Economy, and Why It Matters For Global Capitalism... We are, it turns out, slaves to the Animal Spirits. They have brought us to our knees. And now they are the only things that can save us. -- Michael Scherer, Time.com's Swampland 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. The orthodoxy needs to be rebuilt, and bringing these psychological factors into the core of economics is the way to do it... The connections between their thinking on the limits to conventional economics and the issues thrown up by the breakdown are plain, even if they were unable to make every link explicit. Even more than Akerlof and Shiller could have hoped, therefore, it is a fine book at exactly the right time... Animal Spirits carries its ambition lightly--but is ambitious nonetheless. Economists will see it as a kind of manifesto. -- Clive Crook, Financial Times An influential Democrat who was also one of the world's top-ten, highest-paid hedge fund managers last year thinks he knows which book is at the top of the White House reading list this spring: Animal Spirits, the powerful new blast of behavioural economics from Nobel prize-winner George Akerlof and Yale economist Robert Shiller. -- Financial Times Akerlof and Shiller remind us that emotional and intangible factors--such as confidence in institutions, illusions about the nature of money or a sense of being treated unfairly--can affect how people make decisions about borrowing, spending, saving and investing. Animal Spirits is an affectionate tribute to the man [John Maynard Keynes] whose ideas, unfashionable for the past 30 years, have resurged. -- Nature Animal Spirits is a welcome addition to our Hannitized national economic debate, in which anyone who advocates government spending risks being labeled a socialist... Animal Spirits is most compelling when the authors summon all the key behavioral patterns to explain vast, complex phenomena such as the Great Depression... Animal Spirits ... [is] aimed squarely at the general reader, and rightly so: Macroeconomics is now everybody's business--the banks are playing with ou

 Be the first to write a customer review