Narrative Economics

Outline

Narrative Economics (2019) argues that popular stories spread like viruses and can drive major economic events, from booms and bubbles to recessions. Robert Shiller shows how narratives about topics such as stock markets, housing, and technology influence how people spend, save, and invest. He calls on economists to study these stories seriously to better understand and predict economic change.

• Popular stories spread from person to person much like viruses, and some of them end up shaping major economic events.
• Narratives help drive booms, bubbles and recessions, sometimes with more force than data alone.
• Stories about the stock market, housing and technology influence how people spend, save and invest.
• Economists should study popular narratives seriously if they want to understand and predict economic change.

Robert Shiller is an American economist and professor at Yale University who shared the Nobel Prize in Economics in 2013 for his work on asset prices. He is known for warning about the dot-com and housing bubbles before they burst. His books include Irrational Exuberance, Animal Spirits, written with George Akerlof, and Narrative Economics.