More than 50 local executives tonight joined world-class economists George Akerlof and Robert Shiller, co-authors of the book “Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism.” The professors were invited to share their insights and ideas on the economy at the Greater Washington Board of Trade (pictured here with BOT president and CEO Jim Dinegar and Perry Hooks). Afterward they responded to questions about their forecasts on the future of the economy.
About the Authors: Akerlof is the Daniel E. Koshland Sr. Distinguished Professor of Economics at the University of California, Berkeley. He was awarded the 2001 Nobel Prize for Economics. Shiller is the best-selling author of “Irrational Exuberance” and “The Subprime Solution.” He is the Arthur M. Okun Professor of Economics at Yale University and the co-creator of the Case-Shiller index.
About the Book: 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 won’t 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.