Animal Spirits
What is Animal Spirits?
Keynes's term for the emotions and confidence that drive investment decisions.
Understanding Animal Spirits
In the General Theory, Keynes argued that many business decisions are not the result of precise calculation but of a spontaneous urge to act, which he called animal spirits.
Swings in confidence can therefore drive investment and the business cycle. Economists George Akerlof and Robert Shiller revived the term in their 2009 book Animal Spirits.