The Rafael del Pino Foundation hosted George Akerlof's Keynote Lecture entitled "Animal Spirits", within the series of Keynote Lectures "What will our societies be like after the crisis?", on 17 November 2009.
Professor Akerlof said: "Economic stimulus packages are still needed. In the US, the unemployment rate is above 10%, higher than it should be. So there is still a need for stimulus packages for the economy, and it seems to me that we will need them until we get closer to full employment, which is one of the tasks of the government.
Regarding the rise of stock markets in the midst of the crisis, George Akerlof said that "it may be a case of 'animal spirits', which is the theme of our book. But in fact I think there are at least three good reasons why stock markets are so high; first, in this recession, which is quite unusual, productivity has risen rather than fallen, which together with controlled wages suggests that corporate profits should rise; second, interest rates are low; and third, there are concerns about inflation, and stock market investment is a good way to offset the risk of inflation. I do not expect to see high levels of inflation, especially in this environment of high unemployment. The fact is that I don't know the exact reason why stock markets are so high, but there are those objective reasons, hopefully, that explain these stock market highs, and that it is not a case of 'animal spirits'.