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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. Table of Contents Preface to the Paperback Edition Preface Acknowledgements Introduction Part One: Animal Spirits 1. Confidence and Its Multipliers 2. Fairness 3. Corruption and Bad Faith 4. Money Illusion 5. Stories Part Two: Eight Questions and their Answers 6. Why do Economies Fall into Depression? 7. Why Do Central Bankers have power over the Economy (Insofar as They Do)? Postscript to Chapter 7. the Current Financial Crisis: What is to be done? 8. Why are there People who cannot find a Job? 9. Why is there a trade-off between Inflation and Unemployment in the Long Run? 10. Why is saving for the Future so Arbitrary? 11. Why Are Financial Prices and Corporate Investments So Volatile? 12. Why Do Real Estate Markets Go through Cycles? 13. Why Is there Special Poverty among Minorities? 14. Conclusion Notes References Index

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...  Read More