Animal Spirits Chapter Summary

Economists Robert Shiller and George Akerlof liberated their thoughts and findings in Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism in 2009. Both Shiller and Akerlof are highly recognizable names when it comes to economics. Akerlof is a professor of economics at the University of California Berkeley and is recognized by his achievements in 2001 where he was the Nobel Prize winner for economics. At Yale University, Shiller is also an economic professor and has recently accepted the Nobel Memorial Prize in 2013. Shiller and Akerlof chose a deliberate comic on the front of their work, highlighting monkeys on a stock market curve. This was the first thing I noticed regarding the book, the monkeys seem to be cheerful at the peak of the curve, nervous-looking when on the decline, and absolutely frightened at the bottom of the curve. This comic feature gives a good basis of what Shiller and Akerlor want to portray to their audience, especially right after the financial crisis in 2008. Animal Spirits is broken down into two parts with fourteen chapters, where part one explains the five components that humans possess which contradict rational economics. These components …show more content…
These questions are answered in the context of animal spirits to help the reader fully understand the effect of behavioral economics. The questions include: Why do Economies Fall into Depression? Why do Central Bankers Have Power Over the Economy? The Current Financial Crisis? Why are There People Who Cannot Find a Job? Why is There a Trade-off Between Inflation and Unemployment in the Long Run? Why is Saving for the Future so Arbitrary? Why are Financial Prices and Corporate Investments so Volatile? Why do Real Estate Markets Go Through Cycles? And finally Why is There Special Poverty Among