• Animal spirits come from the Latin spiritus animalis: “breath that awakens the human mind.” It was introduced by the British economist John Maynard Keynes in 1936.

  • Animal spirits refer to how human emotions can influence financial decision making in times of uncertainty and instability.
  • Animal spirits mainly explain the psychology of the market and, in particular, the role of emotions and herd mentality in investing.
  • Animal spirits help explain why people behave irrationally and are precursors to modern behavioral economics.
  • We can see the concept of vitality in action during financial crises, including the Great Recession of 2007-2009.