Animal Spirits: How Human
Psychology Drives the Economy, and
Why It Matters for Global Capitalism
by Robert J. Shiller
Easy To Read And Enjoy
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 wont 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.
Personal Review: Animal Spirits: How Human Psychology
Drives the Economy, and Why It Matters for Global Capitalism by
Robert J. Shiller
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
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