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Preview — Animal Spirits by George A. Akerlof
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
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...more
A summary of the Keynesian 'animal spirits', or non-rational economic actions which people do, sometimes contributing to later economic crises. These include, but are not limited to, Confidence, the myth of fairness, the illusion of money, corruption, and 'Stories' as past explanations of behavior.
These are applied to multiple questions, such as real estate bubbles, central banking, racial discrimination, why recessions happen ...more
Akerlof and Shiller are notorious advocates of Keynesian thought. Not because of some underhanded desire to ...more
I also really liked the chapter on the asymmetrical behaviour of compensation in economic down-turns vs. up-turns, again because the subject wasn't given significant text in other books. The book doesn't explore the solution space much- my first thought is that an progressive proportion of wages should be in the flexible form of stock options in the employers ...more
Akerlof and Shiller are great economic thinkers who systematically approach economics from the ground up, and focus on how our "animal spirits" affect the economy. It is very well-written, engaging and easy to read.
I pa ...more
This book is about the failure of the standard model of economics to either predict or to cope with the recent housing crisis.
The term “animal spirits” was used by John Maynard Keynes in his 1936 book "The General Theory of Employment, Interest and Money" to describe the instincts and emotions that influence economic behavior.
Keynes said, “There is instability due to … human nature … a large proportion of our positive activities d ...more
This is not your typical economic book talking about theories. Economic theories are based on efficient markets and rational people which we all know does not exist in the real world. The authors believe that animal spirits, or human psychology, are really motivates people. These animal spirits include confidence, fairness, corruption, money illusion, and story telling. ...more
As can be typical of many books, this could have been a 40 page pamphlet and still gotten the same point across.
As a point of i ...more
Bit of a 101 text though it has been a few years. A nice refresher with some important points regarding the economic monarchy we live under. While they are both academics in the economic firmament they remind the reader that theory has spent its time prescribing from its own arguments rather than trying to explain. Most economists hide in mathematics for their science quotient but the authors justly remind the astute reader there are other unexplored elements behind all the numbers. You know, pe ...more
The book advocated for governmental regulations in the financial industry. The author used the current economic events as well as others to make their points. They argued that regulations would help keep the system m ...more
Akerlof correctly shows how current economic thinking, in particular the Chicago school, over-simplified mass behavior by assuming that all individuals behave as if they were rational economic actors. The truth is that humans are rational actors, but their motivations are not all economic. Akerlof examines five important psychological elements that ...more
As we write this in October 2009, we are afraid that the optimism, even if still a bit guarded, reflects an Indian summer. We do not know what lies ahead. We go along with those who consider it a good sign, at the time of this writing, that there are “green shoots” of recovery, and that forecasters are talking about growth of GDP sometime in the near future. It would be far worse...more
JDN 2456563 PDT 15:10.
A review of Animal Spirits by George A. Akerlof and Robert J. Shiller.
When I first came to CSULB about a month and a half ago, we had an orientation for graduate students. One of the faculty members there (Seiji Steimetz, for whom I am now a graduate assistant, and whom I have come to adore) asked us all a question: "What kind of research do you want to be involved in?" Most of the students didn't have an answer. I had an answer I didn't ...more
This is an important book, because it explains how some very human psychological tendencies tend to drive the economy -- and in particular to create booms and busts -- that aren't explained easily by rational macroeconomics.
There are some parts that are slow going, particularly (for me) a chapter on "money illusion," which as I understand it is basically people's inability to grasp that money changes in value with inflation and deflation. It might seem that people have an intuitive grasp of thi ...more
'Em sua acepção original, na forma latina antiga e medieval, spiritus animalis, a ...more
How do we know that these changes could not ...more
Nobel laureate George A. Akerlof and prescient Yale economics professor Robert J. Shiller explain the role of human psychology in markets. They say conventional economic theory assigns too much weight to the role of reason in economic decision making, and too little to the role of irrational emotional and psychological factors. That insight would have been novel a few years back, but numerous other authors have made the same point, though few with suc ...more
The book is short for a reason, I think -- its main point is quite concise. When John Maynard Keynes originally unveiled his theory of economics, he included as a major part of it the idea that the markets are ruled in part by "animal spirits," -- irrational, or at least nearly unquantifia ...more