Animal Spirits

By George A. Akerlof, Robert J. Shiller,

Book cover of Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism

Book description

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…

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Why read it?

2 authors picked Animal Spirits as one of their favorite books. Why do they recommend it?

One of the disadvantages to writing a book with any economics in it is just that, readers need to know a little economics to get the most out of your book.

But to grasp how oil and the dollar interact and why we wind up in repeating financial crises, you don’t have to go back and reread Keynes and Irving Fischer (on interest rates). In 2009, Nobel Prize-winning economists George Akerlof and Robert Shiller wrote this easy-to-read and easy-to-understand book that critiques traditional economics (e.g. it’s dependence on “rational” actors) and dissects the building blocks one needs to know to…

Revolutionary book of that time, which was really exciting to read since it shows that psychology might play a very important role at the aggregate level.

According to my view, it started to build the pavement for modern discipline of behavioral macroeconomics. It borrows the famous concept of animal spirits in order to emphasize the break with the tradition of standard economics described by rationality. Animal spirits represent absolutely unavoidable element of working in the real economy, because of the biased behavior of humans.

These animal spirits such as framing, confidence, and its multipliers, fairness, or money illusion are used…

From Helena's list on economic reads about money illusion.

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