Dr. Shiller’s Animal Spirits
Yale economist Robert Shiller will keynote the proceedings of the Builder 100 conference for home building’s leading executives next Wednesday, May 13, in Chicago.
In this past Sunday’s New York Times, Shiller accentuates the positive as he takes on the question of whether the current economic crisis has begun slowly to subside, or whether we’re due for even heavier weather.
In his Depression Scares are Hardly New essay, it’s as if Dr. Shiller is giving a patient news that he’s very sick and the prognosis could go either way, but there’s plenty of cases that don’t wind up going to hell in a handbasket.
Shiller, these days, is preoccupied by psychological factors that impact human behavior in the financial and other markets–”Animal Spirits,” he calls them. He’s surprised, in fact, that people at large seem to be less daunted by economic conditions than experts with specific technical insight into what is so woefully wrong with things right now.
He writes in the Times:
This time, the reasons to fret about a possible depression may seem less concrete. For most people, the worries that consume economists and accountants, about things like bank stress-test results or the “OIS-Libor spread,” are rather hard to comprehend.
As Franklin D. Roosevelt famously said during the Great Depression, “the only thing we have to fear is fear itself.” Let’s hope that is true, and that the relative complacency in the general population is good news for the economy.
In a sense, the term “complacency” may serve as a kind of methadone treatment for an economy that seems bent on fixing its balance sheet cold turkey, from the household to the global economic complex.
In “Animal Spirits,” a book Dr. Shiller has written with George A. Akerlof, we get a take on economics and an explanation of what is going on now, in down to earth terms that anybody can grasp.
Dr. Shiller introduces us to his theory and where it applies in this video from The McKinsey Quarterly, taped last month.
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I’m about to review that book for Inman News, and hopefully also interview Dr. Shiller for my new show on BlogTalkRadio. I’m sure his speech at the Builder100 will be illuminating!