Animal spirits do cause booms
- April 6, 2010
- A study by Fabio Milani, economics assistant professor, is featured in the Investors Chronicle March 26, 2010
From the Investors Chronicle:
Ever since Maynard Keynes coined the phrase in the 1930s, economists have suspected that "animal spirits" - waves of irrational pessimism or optimism - could be a cause of recessions and booms, as George Akerlof and Robert Shiller argued in a recent book. For years, though, it's been difficult to test this theory because it's been hard to distinguish between rational and irrational pessimism. However, a recent paper by Fabio Milani of the University of California at Irvine has tried to solve this problem - and he's found that animal spirits do indeed matter.
For the full story, please visit http://www.investorschronicle.co.uk/Columnists/ChrisDillow/article/20100....
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