There’s been a lot of talk about which economic theories make the most sense of the current economic situation in September 2009. One of the economists whose theories are enjoying something of a renaissance is John Maynard Keynes, and his theory that economics is driven by human psychology.
Economist Robert J Shiller talks about Keynes’ theory of the “spontaneous urgent action” of people’s animal spirits that drives the economy up–but that recession or depression “beats them down.” Dr. Shiller has written a book about this with a co-author, Nobel Prizewinner George A. Akerlof, called Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism
Dr. Shiller is the Professor of Economics and professor of finance at Yale University. He is the creator, with Karl Case, of the S&P/Case Shiller home price index and co-founder and chief economist of MacroMarkets. He has written several other books, including Subprime Solution: How the Global Financial Crisis Happened and What to Do about It.