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

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.