The global financial crisis has made it clear that powerful psychological forces are imperiling the wealth of nations. This title challenges the economic wisdom that got us into this mess, and puts forward a vision that transforms economics and restores prosperity. It asserts the necessity of an active government role in economic policymaking.

Shortlisted for the 2009 "Financial Times/ Goldman Sachs Business Book Of The Year" award, and ahead of the eventual winner in the online poll, this incisive book explores the role of human psychology in the global financial system and offers a radical new way to think about the economy. Priced competitively, this will be of great interest to anyone in business, or those who just want to understand how recent crises have occurred.

"Akerlof and Shiller deserve at least two cheers--one for providing a more solid psychological foundation for our understanding of confidence and another for re-introducing such an important concept into mainstream macroeconomics."---Martin Rapetti, Eastern Economic Journal