Animal spirits

"Animal spirits" is the term John Maynard Keynes used in his 1936 book The General Theory of Employment, Interest and Money to describe emotions which influence human behavior and can be measured in terms of consumer confidence. Trust is also included or produced by "animal spirits". Several articles and at least two books with a focus on "animal spirits" were published in 2008 and 2009 as a part of the Keynesian resurgence.^[1][2]

The original passage by Keynes reads:

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits – a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.^[3]

Keynes seems to be referencing David Hume's term for spontaneous motivation. The term itself is drawn from the Latin spiritus animales which may be interpreted as the spirit (or fluid) that drives human thought, feeling and action.

See also

• Behavioral economics
• Decision making
• Drive theory
• Emotions

Notes

External links

• The Economist Economic terms: Animal spirits
• A special report on the future of finance: Wild-animal spirits, The Economist, January 22, 2009
• Robert J. Shiller, Animal Spirits Depend on Trust: The proposed stimulus isn't big enough to restore confidence, The Wall Street Journal, January 27, 2009
• Animal Spirits: Affective and Deliberative Processes in Economic Behavior, Loewenstein, George and O'Donoghue, Ted, Cornell University Working Paper 04-14