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

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

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by George A. Akerlof, Robert J. Shiller
     
 

The global financial crises of recent years have made it painfully clear that psychological forces can imperil the wealth of nations. From blind faith in ever-rising housing prices to plummeting confidence in capital markets, "animal spirits" drive financial events worldwide. In this book, acclaimed economists George Akerlof and Robert Shiller present a serious

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Overview

The global financial crises of recent years have made it painfully clear that psychological forces can imperil the wealth of nations. From blind faith in ever-rising housing prices to plummeting confidence in capital markets, "animal spirits" drive financial events worldwide. In this book, acclaimed economists George Akerlof and Robert Shiller present a serious alternative to the standard economic theory that has failed to account for these essential human factors, and provide a radical new way to think about the economy.

Looking back to the prevalent despondence preceding the Great Depression and the changing psychology that accompanied recovery-which led John Maynard Keynes to coin the term "animal spirits"-Akerlof and Shiller reassert the necessity of an active government role in economic policymaking. In a new preface, they describe why our economic troubles may linger for some time-unless we are prepared to take further, decisive action.

Product Details

ISBN-13:
9780691145921
Publisher:
Princeton University Press
Publication date:
02/21/2010
Edition description:
With a New preface by the authors
Pages:
256
Sales rank:
195,225
Product dimensions:
5.40(w) x 8.10(h) x 0.90(d)

Table of Contents

Preface to the Paperback Edition vii

Preface xxi

Acknowledgments xxvii

Introduction 1

Part 1 Animal Spirits

1 Confidence and Its Multipliers 2

2 Fairness 19

3 Corruption and Bad Faith 26

4 Money Illusion 41

5 Stories 51

Part 2 Eight Questions and Their Answers

6 Why Do Economies Fall into Depression? 59

7 Why Do Central Bankers Have Power over the Economy (Insofar as They Do)? 74

Postscript to Chapter seven The Current Financial Crisis: What Is to Be Done? 86

8 Why Are There People Who Cannot Find a Job? 97

9 Why Is There a Trade-off between Inflation and Unemployment in the Long Run? 107

10 Why Is Saving for the Future So Arbitrary? 116

11 Why Are Financial Prices and Corporate Investments So Volatile? 131

12 Why Do Real Estate Markets Go through Cycles? 149

13 Why Is There Special Poverty among Minorities? 157

14 Conclusion 167

Notes 177

References 199

Index 219

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