Animal spirits: Keynes' theory of rational investment decision-making under conditions of fundamental uncertainty | Zendy

Ognjen Radonjić | Zendy

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Animal spirits: Keynes' theory of rational investment decision-making under conditions of fundamental uncertainty

Author(s) -

Ognjen Radonjić

Publication year - 2009

Publication title -

theoria beograd

Language(s) - English

Resource type - Journals

eISSN - 2406-081X

pISSN - 0351-2274

DOI - 10.2298/theo0901017r

Subject(s) - animal spirits , irrational number , economics , investment (military) , rationality , positive economics , neoclassical economics , keynesian economics , psychology , epistemology , philosophy , social psychology , political science , law , mathematics , politics , geometry

Keynes's term, animal spirits, has been mistakenly confused with irrational decision-making. However, if we accept Keynes' assumption that future is fundamentally uncertain and nonergodic, animal spirits become key factor that makes continual process of investment decision-making possible. On the other hand, if animal spirits blunt, investment activity dwindles and makes emergence of deep economic crisis likely

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