"Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism" is a book by George A. Akerlof and Robert J. Shiller, published in 2009. It challenges the neoclassical economic theory, which assumes that economic decisions are based on rational calculations and statistical data. Instead, the book argues that human psychology, particularly "animal spirits," plays a crucial role in shaping economic behavior. These animal spirits include trust, justice, corruption, money illusion, and stories, which influence individual decisions and economic outcomes. The book presents five key motives that affect economic decisions: trust, justice, corruption, money illusion, and stories. It then addresses eight questions about the economy, explaining how these animal spirits influence economic phenomena. The book critiques the neoclassical economic models that rely on statistical and econometric data, arguing that they fail to account for the psychological aspects of human behavior. Instead, it promotes behavioral economics, which emphasizes the role of emotions, biases, and social factors in economic decisions. The book highlights how economic recessions can be caused by a loss of trust and the spread of negative stories. It also explains why central banks have significant influence over the economy, as they help maintain confidence during crises. The book discusses the relationship between unemployment and inflation, arguing that traditional economic theories fail to account for the role of psychological factors. It also explores why people make irrational decisions about savings, how asset prices and investment flows are volatile, and why real estate markets experience cycles. Additionally, the book addresses why poverty persists among ethnic minorities and how economic policies can affect perceptions of fairness and trust. Overall, the book provides a comprehensive analysis of how human psychology shapes economic behavior and challenges the traditional economic models that ignore these factors. It emphasizes the importance of understanding the psychological aspects of economic decisions to better understand and manage the global economy."Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism" is a book by George A. Akerlof and Robert J. Shiller, published in 2009. It challenges the neoclassical economic theory, which assumes that economic decisions are based on rational calculations and statistical data. Instead, the book argues that human psychology, particularly "animal spirits," plays a crucial role in shaping economic behavior. These animal spirits include trust, justice, corruption, money illusion, and stories, which influence individual decisions and economic outcomes. The book presents five key motives that affect economic decisions: trust, justice, corruption, money illusion, and stories. It then addresses eight questions about the economy, explaining how these animal spirits influence economic phenomena. The book critiques the neoclassical economic models that rely on statistical and econometric data, arguing that they fail to account for the psychological aspects of human behavior. Instead, it promotes behavioral economics, which emphasizes the role of emotions, biases, and social factors in economic decisions. The book highlights how economic recessions can be caused by a loss of trust and the spread of negative stories. It also explains why central banks have significant influence over the economy, as they help maintain confidence during crises. The book discusses the relationship between unemployment and inflation, arguing that traditional economic theories fail to account for the role of psychological factors. It also explores why people make irrational decisions about savings, how asset prices and investment flows are volatile, and why real estate markets experience cycles. Additionally, the book addresses why poverty persists among ethnic minorities and how economic policies can affect perceptions of fairness and trust. Overall, the book provides a comprehensive analysis of how human psychology shapes economic behavior and challenges the traditional economic models that ignore these factors. It emphasizes the importance of understanding the psychological aspects of economic decisions to better understand and manage the global economy.