Transcript
William Galston: Well, we are here to hear about and to discuss a very, very important new contribution to this environment within which public policy is going to be discussed. It is an extraordinarily not only important but well-timed contribution, and it is a book entitled Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism.
As we hear reports every day about confidence or lack of confidence, trust or lack of trust, and the way in which these human sentiments and beliefs drive economic behavior and not only economic behavior, the timeliness and importance of this concept requires no justification. The two authors of this book are so well known as to require almost no introduction, and so I will give them almost no introduction in part because very full information about them is contained on the information sheets that you all have.
Suffice it to say that George Akerlof is the Koshland Professor of Economics at the University of California. We're proud to say that he's a nonresident Senior Fellow in the Economics Studies Program here at Brookings, and he was a co-winner of the 2001 Nobel Prize in Economics on the topic of Extraordinary Variety in Fruitfulness, namely Information Asymmetry. In plain English, if I know something that you don't and we're about to engage in an exchange, I have some advantages. You're at a disadvantage and this is something that has clear application to insurance markets and lots of other things besides.
The co-author is Robert J. Shiller, and he is the Arthur Okun Professor of Economics at Yale. He's also the Professor of Finance and Fellow in the International Center for Finance at the Yale School of Management, and, you know, you probably know him in various contexts. Let me just mention two. He is the Shiller of the well-known case Shiller Index, which has not been behaving very well recently but is telling the truth unfortunately, and you may also have heard of his book, Irrational Exuberance, which went into a second edition. It's been translated into 15 foreign language editions. And so it will be very interesting to find out how Irrational Exuberance, which sounds somehow negative, you know, morphs into animal spirits, which sounds, particularly in the current depressed circumstances, somewhat positive.
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