Feb 27, 2013
from 06:00 PM to 07:30 PM
|Where||Ramsden Room, St Catharine's College|
|Contact Name||Philip Arestis|
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The next St Catharine's Political Economy Seminar in the series on the
Economics of Austerity, will be held on Wednesday 27th February 2013 -
Michelle Baddeley will give a talk on 'Animal Spirits Under Austerity'.
All are welcome.
MICHELLE BADDELEY is a behavioral economist currently based at Gonville and
Caius College, Cambridge (moving to a chair at the UCL Bartlett Faculty of
the Built Environment in March). She explores links between economics,
psychology and sociology, and has used experimental/neuroscientific
techniques to analyse links between personality/emotions and herding/social
influence. Other experimental analyses have shown that social influences
affect housing markets and jury deliberations. Her current research explores
behavioural biases in learning, energy demand and online decision-making.
Her books include Investment - Theories and Analysis (2003), Running
- A Practical Guide to Quantitative Research (2007), and Behavioural
Economics and Finance (2012).
CONTENT: Animal spirits are increasingly prominent in macroeconomics and a
range of approaches has emerged extending Keynes's original conception of
animal spirits as a determinant of entrepreneurial investment. This
presentation analyses animal spirits in the light of current policy debates,
building also on insights from modern behavioural macroeconomics.
Crowding-out of private investment by public investment is unlikely in a
recessionary environment so if uncertainty depresses private investment by
dampening animal spirits and if reductions in private investment are
compounded by reductions in public investment, then the impacts on investor
sentiment are likely to be negative, with wide-ranging implications for
aggregate demand, employment and growth: in a pessimistic environment, the
prospects for recovery are slim. In this presentation, the links between
animal spirits, fiscal austerity and macroeconomic performance will be
assessed using evidence from a range of OECD economies, focusing also on the
relationship between fiscal stringency and policy flexibility more generally
when private decisions are propelled by animal spirits.