Animal Spirits, An Obama Book Club Selection

White House Budget Director Peter Orszag... has been spending his time recently reading not about spreadsheets, but about psychology. In particular, he has been reading a new book by the economists George Akerlof and Robert Shiller called "Animal Spirits: How Human Psychology Drives The Economy, and Why It Matters For Global Capitalism."  ("A White House Seized by the Animal Spirits," TIME.)A book by two economics professors has the attention of the White House. It implies we're irrational economic animals and the government is the wise zookeeper.First, here's a definition of "animal spirits" as coined by British economist John Maynard Keynes (1883-1946)."The colourful name that Keynes gave to one of the essential ingredients of economic prosperity: confidence. According to Keynes, animal spirits are a particular sort of confidence, ‘naive optimism.' He meant this in the sense that, for entrepreneurs in particular, ‘the thought of...(Read Full Article)

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