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ANIMAL SPIRITS: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism

$24.95

Economists George Akerlof and Robert Shiller revive the idea of “animal spirits”—a term coined by John Maynard Keynes—as the key to understanding the chaos in modern financial markets. They advocate that governments take an active role in managing the powerful forces of human psychology that drive the global economy.

Both men bring impressive credentials to their task: 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. Shiller, meanwhile, is the best-selling author of Irrational Exuberance and The Subprime Solution, and the Arthur M. Okun Professor of Economics at Yale University.

“In their new book, two of the most creative and respected economic thinkers currently at work… 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.... Economists will see it as a kind of manifesto.”—Clive Crook, Financial Times.

“Just in time for a 21st-century crisis, Messrs. Akerlof and Shiller aim to revive the true Keynesian legacy. Drawing broadly from social science, the authors provide their own ‘behavioral economic’ theory of the five key animal spirits that matter: confidence, fairness, corruption, stories we tell about ourselves, and ‘money illusion’, which means the extent to which one is fooled by inflation.”—Andrew Rosenblum, New York Observer. •