Dan's Reviews > Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism

Animal Spirits by George A. Akerlof
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Jul 12, 09

Read in July, 2009

Written by two economists from Berkeley and Yale, this book should be worth reading. The basic premise of the book is that Milton Friedman led the economic community astray by his claims that the market moves in an efficient manner in which each actor does what is best for herself economically. The authors point out that Friedman departed from Keynes, who felt that other, non-economic factors also influence the economy. Akerlof and Shiller believe that factors other than purely economic motives, which they term "animal spirits", account for much of what drives the economy. They explain why they feel that accounting for these animal spirits is the best way to recover from the current economic recession.

One disappointing part of the thesis of this book is that, at least at the level developed in the book, it does not lend itself to easy quantification and prediction. It is in fact a desire for such quantification, however, that the authors feel was one of the major factors that led to such ready and nearly complete acceptance of Friedman's view and its application to the US economy by government leaders over the past several decades. They explain why they feel this economic viewpoint led to the current recession.

My main criticism of the book is that it could use substantial editing. It is repetitious to the point of becoming confusing at times. It seems as thoug the authors took a journal article or two and stretched them to make a book.
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