"Animal Spirits " by David Akerlof

" The human mind is built to think in terms of narratives, of sequenes of events with an internal logic, and dynamic that appear as a unified whole !

In turn, much of human motivation comes from living through a story of our lives, a story, that we tell to ourselves and that creates a framework for motivation ! Life could be just " one damn thing after another " if it weren't for such stories.

This is true for confidence in a nation, a company or an institution or any organization. Great leaders are first and foremost, creators of stories ! The confidence of a narration, or of a large group tends to revolve around stories !

Of relevance are , new era stories, those , that purport to describe historic changes that will propel the economy into a brand new era.

Confidence is not , just the emotional state of an individual. It is a view of other people's confidence, and of other people's perceptions of other people's confidence !

Confidence then, is also a view of the world - a popular model of current events, a public understanding of the mechanism of economic change as informed by the news media and by popular discussions. High confidence tends to be associcated with inspirations stories , stories about the new business initiatives, tales of how others are getting rich.

The complexity of the different new era stories through time suggests that, differences in confidence have had many effects on the economy beyond the impact on consumption and investment. Changes in these stories will affect the expectations for personal success in business, for the success of entrepreneurial ventures and for payoffs to human capital investments.

( excerpt from " Animal Spirits " by George Akerlof -winner of Nobel Prize in Economics in 2001)