The book "Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism," written by George A. Akerlof and Robert J. Shiller and published in 2009, challenges the neoclassical economic theory by incorporating animal spirits into economic decision-making. The book is divided into two parts. The first part explains five fundamental motives: trust, justice, corruption, money illusion, and stories. The second part addresses eight economic questions within the framework of these animal spirits. The authors argue that neoclassical economics, which assumes rational economic agents and complete, costless information, fails to explain economic phenomena that are influenced by emotional factors. Behavioral economics, on the other hand, attempts to understand economic events by considering human emotions and behavior. The book criticizes the econometric and statistical models used in neoclassical economics and replaces them with behavioral economic theory. Key topics covered in the book include: 1. **Trust**: Confidence in the economy encourages consumption, investment, employment, and production. Conversely, fear leads to reduced spending and saving. 2. **Justice**: Unfair economic policies can lead to workers choosing not to work rather than accepting unfair compensation. 3. **Corruption**: Bad events remembered by individuals affect the economy, replacing trust with fear and causing panic. 4. **Money Illusion**: People measure their assets and income based on nominal income rather than real income, influenced by a lack of understanding of inflation and deflation. 5. **Stories**: Human minds tend to think in stories, which can strongly influence economic behavior. The book also addresses: 1. **Economic Recession**: Past stories of economic failure and increasing corruption lead to a loss of trust and belief in unfair economic policies. 2. **Central Bank Power**: Central banks mitigate crisis effects by preventing credit transactions from declining, thereby building market confidence. 3. **Unemployment**: Unemployment is influenced by concerns for fairness, stories, and money illusion. 4. **Unemployment and Inflation Trade-off**: Behavioral economics refutes the monetarist theory of a natural rate of unemployment. 5. **Future Rationality in Savings Decisions**: People struggle to focus on the benefits of savings decisions due to animal spirits. 6. **Asset Prices and Investment Flows**: Asset prices are influenced by investor behavior and herd mentality. 7. **Real Estate Cycles**: Increases in real estate prices are often driven by stories of land scarcity and the belief that prices will always rise. 8. **Poverty Among Ethnic Minorities**: Injustices and a sense of victimhood contribute to the persistence of poverty. The book emphasizes the importance of including animal spirits in economic theory to better understand and explain economic behavior, particularly in global capitalism.The book "Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism," written by George A. Akerlof and Robert J. Shiller and published in 2009, challenges the neoclassical economic theory by incorporating animal spirits into economic decision-making. The book is divided into two parts. The first part explains five fundamental motives: trust, justice, corruption, money illusion, and stories. The second part addresses eight economic questions within the framework of these animal spirits. The authors argue that neoclassical economics, which assumes rational economic agents and complete, costless information, fails to explain economic phenomena that are influenced by emotional factors. Behavioral economics, on the other hand, attempts to understand economic events by considering human emotions and behavior. The book criticizes the econometric and statistical models used in neoclassical economics and replaces them with behavioral economic theory. Key topics covered in the book include: 1. **Trust**: Confidence in the economy encourages consumption, investment, employment, and production. Conversely, fear leads to reduced spending and saving. 2. **Justice**: Unfair economic policies can lead to workers choosing not to work rather than accepting unfair compensation. 3. **Corruption**: Bad events remembered by individuals affect the economy, replacing trust with fear and causing panic. 4. **Money Illusion**: People measure their assets and income based on nominal income rather than real income, influenced by a lack of understanding of inflation and deflation. 5. **Stories**: Human minds tend to think in stories, which can strongly influence economic behavior. The book also addresses: 1. **Economic Recession**: Past stories of economic failure and increasing corruption lead to a loss of trust and belief in unfair economic policies. 2. **Central Bank Power**: Central banks mitigate crisis effects by preventing credit transactions from declining, thereby building market confidence. 3. **Unemployment**: Unemployment is influenced by concerns for fairness, stories, and money illusion. 4. **Unemployment and Inflation Trade-off**: Behavioral economics refutes the monetarist theory of a natural rate of unemployment. 5. **Future Rationality in Savings Decisions**: People struggle to focus on the benefits of savings decisions due to animal spirits. 6. **Asset Prices and Investment Flows**: Asset prices are influenced by investor behavior and herd mentality. 7. **Real Estate Cycles**: Increases in real estate prices are often driven by stories of land scarcity and the belief that prices will always rise. 8. **Poverty Among Ethnic Minorities**: Injustices and a sense of victimhood contribute to the persistence of poverty. The book emphasizes the importance of including animal spirits in economic theory to better understand and explain economic behavior, particularly in global capitalism.