My book of the week is an easy one this time around: It’s Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, by Robert Shiller and George Akerlof. I get sent a lot of books here, most of which get shelved or sent elsewhere after a few pages, but this one is very good.
Admittedly, I’m biased as a fan of both Shiller’s and Akerlof’s. Believe me , however, when I say the blessedly brief Animal Spirits is a thoughtful and well-written look at how economics discarded psychology and lost its way on the trip from Adam Smith, through Keynesianism, to laissez-faire. The book puts the current crisis in a useful economic context, with consistent and practical selections from behavioral finance illuminating everything along the way. While it’s not truly a book about the current depression, I am sure it will remain on my list of recommended books touching on the subject.