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Narrative Economics Reviews

Narrative Economics by Robert J. Shiller

Narrative Economics

How Stories Go Viral and Drive Major Economic Events

Robert J. Shiller

Score pending

2 reviews

Category: Non-fiction, Psychology
Imprint: Princeton University Press
Publisher: Princeton University Press
Publication date: 23 Aug 2019
ISBN: 9780691182292

From Nobel Prize-winning economist and New York Times bestselling author Robert Shiller, a new way to think about how popular stories help drive economic events In a world in which internet troll farms attempt to influence foreign elections, can we afford to ignore the power of viral stories to affect economies? In this groundbreaking book, Nobel Prize-winning economist and New York Times bestselling author Robert Shiller offers a new way to think about the economy and economic change. Using a rich array of historical examples and data, Shiller argues that studying popular stories that affect individual and collective economic behavior-what he calls "narrative economics"-has the potential to vastly improve our ability to predict, prepare for, and lessen the damage of financial crises, recessions, depressions, and other major economic events. Spread through the public in the form of popular stories, ideas can go viral and move markets-whether it's the belief that tech stocks can only go up, that housing prices never fall, or that some firms are too big to fail. Whether true or false, stories like these-transmitted by word of mouth, by the news media, and increasingly by social media-drive the economy by driving our decisions about how and where to invest, how much to spend and save, and more. But despite the obvious importance of such stories, most economists have paid little attention to them. Narrative Economics sets out to change that by laying the foundation for a way of understanding how stories help propel economic events that have had led to war, mass unemployment, and increased inequality. The stories people tell-about economic confidence or panic, housing booms, the American dream, or Bitcoin-affect economic outcomes. Narrative Economics explains how we can begin to take these stories seriously. It may be Robert Shiller's most important book to date.

3 stars out of 5
8 Jan 2020

"The strongest section of this book argues for seven propositions of narrative economics. "

The strongest section of this book argues for seven propositions of narrative economics. The warning that “truth is not enough to stop false narratives” resonates with too many debates in too many democracies.

Shiller has reanchored the uncertainty of human behaviour and motivation at the heart of economics. An appreciation of the magnitude of his achievement is better earned through his earlier works.

Reviews

4 stars out of 5
Rana Foroohar
1 Nov 2019

"But in Narrative Economics, Shiller goes much broader and deeper, looking at how the stories we tell ourselves about the world drive our behaviour"

One might write a narrative of the past 10 years involving desperate central bankers trying to paper over the misdeeds of selfish and myopic politicians by keeping rates low and unwittingly brewing up a huge asset bubble and higher inequality. But can we actually quantify the effect of narrative economics? Not easily, says Shiller. He calls for more data — in the form of interviews that question people about the stories they tell each other and themselves, and a database of sermons that capture the most important passion plays of the day. Believing that easy money will soon give way to a market crash is certainly one. If Shiller is right, the more we believe it, the more likely it will be.