Will I love Animal Spirits?

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… show more.

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… show more.