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Animal Spirits

Animal spirits is a term most famously employed by J. M. Keynes in The General Theory of Employment, Interest and Money to describe what has been characterized as waves of spontaneous optimism in the economy, noneconomic and/or irrational motivations, speculative economic activity, exogenous or random shocks to beliefs, self-fulfilling prophecies, irrational exuberance, or innate psychological drives, depending on the interpretation of this term that is being presented.

The famous passage from The General Theory on the investment process undertaken by entrepreneurs within capitalism is as follows:

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 on a mathematical expectation.… Most, probably, of our decisions to do something positive … can only ...

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