Written by Akerlof and Shiller, this book talks about the “animal spirit” theory from Keynes, clarifying that the strong physiological force is impelling the economic market. Unlike the theory of rational man in economy, Keynes clarified that humans got an impulsion in investment pushing by the animal spirit.
Akerlof and Shiller reassert the necessity of an active government role in economic policymaking by recovering the idea of animal spirits, a term John Maynard Keynes used to describe the gloom and despondence that led to the Great Depression and the changing psychology that accompanied recovery.
This book mainly talks about macro economy in the view of psychological parts, analyzing how the Great Depression happened and the current macroeconomic policies. It is interesting to read this book during this period after ***continuous stock melting ***in American Stock Market in simply one month.
The whole book is divided into two parts:
