In his 1936 book ‘The General Theory of Employment Interest and Money’ John Maynard Keynes outlined how rather than being independently rational, investors were often prone to erratic herd-like behaviour. He argued that macroeconomic stability is inherently vulnerable to the ‘animal spirits’ of speculators. The recent deflation of the post Global Financial Crisis (GFC) gold price bubble is a prime example of this phenomenon.
The world of Harry Potter is one of fantastical spells, fearsome creatures and powerful witches and wizards. However, Harry and his friends are not immune from the very same economic factors and concepts that also affect us Muggles. Read on to discover the economics behind J.K. Rowling’s magical world.