|  | Authors: George A. Akerlof, Robert J. Shiller
Publisher: Princeton University Press
List Price: $24.95
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Rating:  55 reviews
Sales Rank: 1276
Languages: English (Original Language), English (Unknown), English (Published)
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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Condition: Very clean, in a very good condition, no notes or highlighting inside, it is in a very good shape, ship fast.
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Showing reviews 16-20 of 55
 Easy to read and enjoy August 20, 2009
Larry R Frank, MBA, CFP
1 out of 1 found this review helpful
Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?
Akerlof and Shiller have done an excellent job of introducing how the collective behavior of us all appear to interact. Remember that these are theories as to how to model our behavior with each other in our economic dealings. They discuss the animal spirits of Confidence, Fairness, Corruption and Bad Faith, Money Illusion and Stories. I read it not expecting a detailed treatise on behavioral economics, but as an introduction to this area; an introduction that adds to the reader's awareness in a different manner than other behavioral economics books (see links below). Part two applies these animal spirits to a few situations, that are economic puzzles from a classical perspective, to add to the theories that attempt to explain these puzzles (e.g., Why can't some people find a job? Why is saving so arbitrary? - see Table of Contents).
For those who wish to dive deeper, there are loads of chapter notes and an abundant reference section. These are welcome since the authors do a good job introducing their arguments with plenty of support material if one wants or needs it. Otherwise the work may have become laden with detail that obscures their basic message - our interactions with each other matter. And often we are not even aware of what our motivations are without thinking since these are often subliminal spirits at work.
Other works on behavior and the brain:
Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics by Gary Belsky
Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely
Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich by Jason Zweig
Interesting view that questions traditional thinking August 15, 2009
Mariusz Skonieczny (ClassicValueInvestors.blogspot.com)
3 out of 3 found this review helpful
The authors of this book argue that traditional philosophies of economics are flawed because they assume that people rationally pursue their economic interests, which results in perfect and stable free market capitalism. The traditional views fail to address that people are also guided by noneconomic motivations and they might be irrational and misinformed. In other words, they ignore the animal spirits.
The authors believe that our animal spirits affect economic decisions and help us answer questions such as why economies fall into depression, why people cannot find jobs, why real estate markets go through cycles, and why poverty persists for generations among disadvantaged minorities. I found this book interesting to read.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
To the heart of the matter August 7, 2009
Alain Guillemain (Brisbane, Australia)
1 out of 1 found this review helpful
This book is one of a number of critiques of classical economic theory to surface in the wake of the Global Financial Crisis. The thesis put forward in this book is most plausible. When economics made the break with psychology in the late 1800's, with the critique of Jevons's hedonic calculus, something fundamental and important was lost, namely the link of economic events to the psychological underpinnings of human actions. From that point, economics became a drier, more predictable science, based and modelled on the activity of the all-rational human agent. Despite the mathematical precision with which such rationality can be modelled, time and time again we are reminded of its flawed basis. 'Animal Spirits' does an excellent job at pointing out the key aspects of psychology that underlie economic actions, which eventually result in world-scale events. An excellent read for getting back in touch with the human side of what drives economies.
 Where mainstream macroeconomics breaks down August 6, 2009
Jay C. Smith (Portland, OR USA)
1 out of 1 found this review helpful
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
Anyone with a serious interest in macroeconomic policy or in search of further understanding of how we fell into our current financial crisis should appreciate Animal Spirits. It is not necessary for readers to have had an extensive economics education, but those who have taken at least an introductory macro course likely will find it easier going (and a good refresher if that was long ago).
The term "animal spirits" comes via Keynes and refers to the role of noneconomic motives and irrationality in economic activity. Akerlof and Shiller are critical of contemporary mainstream macroeconomics for its failure to take them into account.
They discuss five aspects of animal spirits, in particular: confidence and feedback patterns that amplify economic disturbances; fairness concerns, especially in the setting of wages and prices; corrupt and antisocial behavior; money illusion, meaning the failure to account properly for inflation or deflation; and the human tendency to use stories to frame understandings and actions. The first part of the book explains these, and the second part shows how they apply to eight questions where the authors believe that mainstream macroeconomics fails to provide adequate answers.
For example, the authors ask "Why do real estate markets go through cycles?" and they conclude that all five aspects of animal spirits played a role in the recent housing boom and bust. Among their answers to the other questions they impressively explain how the Federal Reserve works (or doesn't), the role of fairness in "efficiency wage theory" and its effect on unemployment, and why savings rates vary so dramatically across nations and over time. Their collective answers lead them to advocate a vigorous role for government to (1) promote a level of aggregate demand sufficient to support full employment and (2) to assure sufficient credit flows.
Do not expect to get a consistent sense of the order of magnitude of the actual or potential effects that the various aspects of animal spirits have on economic outcomes (the discussions of efficiency wages and of money illusions are partial exceptions). Surely some of the cited departures from economic motivations and rationality have a bigger impact than others, but on the basis of this book alone it remains difficult to sort these out or to gauge what net effect animal spirits have collectively on the total economy. This is not surprising, since resistance to quantification is a major reason these psychological factors were left out of the mainstream models in the first place.
However, Akerlof and Shiller do suggest a framework for how this task might be approached. At one point they envision a "confidence multiplier" much like the consumption or investment multipliers now commonly applied in macroeconomics. The confidence multiplier would reflect the change in income that results from a one-unit change in confidence (however confidence might be measured). No doubt some of their graduate students are already working on it.
 A Fairytale July 31, 2009
Jeff Garrett (San Diego)
5 out of 21 found this review helpful
Marx would have a good laugh at this one.
These ideas were settled 150 years ago.
The book to read of course is Marx's epic work "Capital"
if thats too difficult start with " The invention of Capitalism" Perelman.
Showing reviews 16-20 of 55
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