- This book is another blend of the ideas of behavioral economics with traditional economic analysis. It's a pretty quick read and I found it interesting.
- The major idea behind the book is that traditional economic analysis misses a lot and actually gets things pretty wrong. The authors present the idea that key concepts are not well understood by economists which really explain why the economy can get so overheated and so depressed. The concepts are confidence, fairness, corruption, money illusion, and stories. The authors devote a chapter defining each concept and how each affects the economy.
- OK, so the book feel a little mushy. The concepts are fairly clear and the authors answer several questions using them. But, it's hard to feel like this is an all-inclusive theory for economic behavior. One of the fun thing about economics is that it pretends to be so predictive with all of its fun charts and curves. These guys, fully aware of all the niceties, decide to take it down. I actually think they are right, humanity can't be fully explained with math, but I really do like pretty and predictive charts.
- I'm probably overstating things a bit. These guys are fully capable of using traditional economic analysis. They just want to overlay it with softer, less mathematical concepts. They mess with the models and show 'general' flaws. Rather than getting it exactly wrong, they strive to get the arrows pointed in the right direction.
- And they are very convincing. It's very helpful that they are writing in early 2009 when the entire world economy looked ready to fail. Their ideas make a great deal of sense in this context.
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism