Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism |  | Authors: George A. Akerlof, Robert J. Shiller
Publisher: Princeton University Press
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Rating:  53 reviews
Sales Rank: 634
Media: Hardcover
Pages: 264
Number Of Items: 1
Shipping Weight (lbs): 1.2
Dimensions (in): 9.3 x 6 x 0.9
ISBN: 0691142335
Dewey Decimal Number: 330.122019
EAN: 9780691142333
ASIN: 0691142335
Publication Date: February 18, 2009
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Product Description
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.
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| Customer Reviews:
Showing reviews 1-5 of 53
 Excellent book regarding current economics October 22, 2009
C. Luther (Oak Ridge, TN USA)
0 out of 1 found this review helpful
Animal Spirits was purchased following a recommendation by my daughter's economics college professor. My fiance has been reading it like a fine wine: a few pages at a time. The information presented is very relevant, thought provoking and promotes a clearer understanding of how we humans interact regarding economics. Excellent reading!!!
 A poor coverage of a very important area October 15, 2009
Aussie Banker (Melbourne, Australia)
5 out of 5 found this review helpful
I bought this book in the hope that it would add something new to the many books on this topic I have read.
It was simply a rehash of other people's work, and then poor coverage of what it all means.
The book lacks any real academic grounding. Maybe I simply misunderstood this as a serious book on the topic rather than a populist book.
If you want a good coverage of how interactions drive economics, I strongly recommend The Origin of Wealth.
 Food For Thought October 8, 2009
Marc Eldridge
2 out of 2 found this review helpful
This is an excellent book, if you give it a pass on being about economics. The strange thing is; I bought this book due to a conservative talk show host(s) urging that this is what Obama lists as required reading! So I thought, oh no I better know what is going to happen to my economic future. I can't even recall if the talk show host(s) said, oh no look what the new President is up to.
But once you read it, it's a no brainer: of course we react with our emotions and we can be fooled for better or worse. The net result is we are the economy. If we act on real data we will make the right choice based on an informed decision. This will dampen or remove the wide swings in the market, since we all know what cards we and others are holding (more or less). Said another way, if we can trust the stock broker's, bankers, Wall Street... et al, we can have faith in our decisions and not have to jump back and forth based on false data or promises. The only problem is we have to have faith in someone to make sure the data is accurate / true with regulations etc.... In the book that someone is the government. Well we are the government or at least we use to be, or are we still, or can we be? So which problem do we solve first?
Be careful what you read...you might learn something...others are telling you doesn't exist.
A case of 'anchoring bias' September 25, 2009
Jan Polowczyk (Poznan, Poland)
8 out of 9 found this review helpful
Economists are discussing the reasons for the last financial crisis, but they agree generally that economics as a science should be a case for revision. The audience is waiting for a decisive book by a new Adam Smith.
The candidate could be in the shape of the new book by George Akerlof and Robert Shiller. Akerlof himself was awarded the 2001 Nobel Prize and he is the main force behind the development of behavioral macroeconomics. Shiller is the main candidate for the next Nobel Prize as a man who foretold the present financial crisis a few years back. These two great names promised a great book. But I fear we are still waiting.
The expression "animal spirits" (spiritus animalis) refers to a basic mental energy and life force. In modern economics it refers to a restless and inconsistent element in the economy. John M. Keynes emphasized the importance of animal spirits in real economic activity, although it did not figure as a determining factor in his economic theory.
Akerlof and Shiller argue and repeat several times that Adam Smith ignored the animal spirits. In fact, Smith is not only the author of "The Wealth of Nations", where he argued that economic behavior was motivated by self-love, but as a professor of moral philosophy he was also the author of "The Theory of Moral Sentiments". According Smith, men, like all other animals are a part of nature. Smith's works were based on a very clear recognition of human psychology. His speculative merchants, butchers, brewers and bakers were real people with all their weaknesses and greed, as well as altruism. Adam Smith is the father of economics as a science. But economic man (homo economicus), as a rational creature motivated purely by economic interests is certainty not his child.
In fact Smith's actors are driven by an internal struggle between their impulsive, fickle and indispensable passions, and their conscience. They are multidimensional human beings. It is therefore high time to recognize him as a forerunner of behavioral economics.
Smith only used the phrase 'invisible hand' three times in all his works, including once in "The Theory of Moral Sentiments" (over 500 pages) and once in "The Wealth of Nations" (over 1000 pages). G.Ackerlof and R.Shiller have used 'invisible hand' four times in their 200 page book.
The Akerlof-Shiller case is only the tip of the 'invisible hand iceberg' developed over many decades by numerous authors. This kind of phenomenon is recognized and described very well by behavioral economics and is called `anchoring bias'.
Jan Polowczyk, Poznan, Poland
Good illustrative examples that debunk the 'efficient' market theories September 14, 2009
BostonSox
2 out of 3 found this review helpful
Schiller has tremendous credibility since he called the bubble back 4 years ago. The book is a good read on why efficient economic theory fails each time because it doesn't take into account irrational behavior that have behavioral roots. I am not an economist and I enjoyed reading the book.
Showing reviews 1-5 of 53
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