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Paper Details

Effects of animal spirits on resource utilization and economic development: The Case of Tanzania

M. E. Mlambiti

Journal Title:Basic Research Journal of Business Management and Accounts

According to the Pre-Keynesian classical economics, private markets (liberalised markets), of their own accord and with no government interference, would as if by an invisible hand assume full employment i.e. full resource utilization. But Keynes took a more moderate approach in that he appreciated and recognised that most economic activities result from rational economic motivations and also that much of the economic activities are governed by animal spirits i.e. people who have non-economic motives and who are not always rational in pursuit of their economic interests. This paper attempts to demonstrate the existence of the animal spirits traits (theory) as related to the economic development process in Tanzania and its effect on the countrys economic development pace by using the Tanzania economic development model. Keywords: Classical economics, animal spirits, politics, resource utilization and economic development.