Synopsis of Animal Spirits



Synopsis of ANIMAL SPIRITS

Animal Spirits: how human psychology drives the economy, and why it is important for Global Capitalism offers an interesting and timely critique of traditional economic theory, and discusses the application of behavioral economics to the various crises of economy, including the current economic crisis. In the first part of the book, Akerlof and Shiller describes the joy of life as a "non-economic reasons' is an aspect of trust, justice, corruption, money illusion, and the stories we tell ourselves, and outline why the presence of these behaviors leads to a failure in the market capitalism. They argue that because human behavior depends on the animal spirits, people do not behave rationally. Thus, economic theory could not predict human behavior accurately.

The second part of the book shows how these irrational instincts to influence economic decisions, responding to eight questions that deal with various economic setbacks. provocative Animal Spirits: The authors provide clear explanations and extensive documentation so that the general audience with interest in the economy may continue to participate. Given the current level of economic upheaval, this book should find wide appeal. no evidence that human psychology drives the economy is a compelling and provides the reader with different perspectives on the economic crises of our time. The authors present a broader view on the economy than the cold economic calculations of economists believe that should be at the root of all economic behavior "(p. 104 ). This book is an important and useful for understanding some of the restrictions in the economic theory of rational expectations. The inclusion of buoyancy in macroeconomic theory is better because it provides a more realistic picture of our world.

How do they relate to deficiencies in the generally accepted economic theories, it may seem that the authors ...