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Ritalin, Animal Spirits and the Productivity Puzzle

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  • Tony Ward

Abstract

This article argues the importance of animal spirits throughout the economy in improving productivity performance. It overviews the idea of animal spirits and people's level of confidence in undertaking economic activity. It then notes a gap, a missing residual, in economists' efforts to understand productivity growth. Two well‐documented measures indicating animal spirits are the levels of social trust and of corruption. Surveying the literature, the article shows both of these correlate with economic performance, and demonstrates they are correlated with each other. A case study of the impact of changes in corruption levels shows animal spirits can have significant effects.

Suggested Citation

  • Tony Ward, 2024. "Ritalin, Animal Spirits and the Productivity Puzzle," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(2), pages 129-142, June.
    • Handle: RePEc:bla:ausecr:v:57:y:2024:i:2:p:129-142
    DOI: 10.1111/1467-8462.12541
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    References listed on IDEAS

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