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Narrative Economics

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Abstract

This address considers the epidemiology of narratives relevant to economic fluctuations. The human brain has always been highly tuned towards narratives, whether factual or not, to justify ongoing actions, even such basic actions as spending and investing. Stories motivate and connect activities to deeply felt values and needs. Narratives “go viral” and spread far, even worldwide, with economic impact. The 1920-21 Depression, the Great Depression of the 1930s, the so-called “Great Recession” of 2007-9 and the contentious political-economic situation of today, are considered as the results of the popular narratives of their respective times. Though these narratives are deeply human phenomena that are difficult to study in a scientific manner, quantitative analysis may help us gain a better understanding of these epidemics in the future.

Suggested Citation

  • Robert J. Shiller, 2017. "Narrative Economics," Cowles Foundation Discussion Papers 2069, Cowles Foundation for Research in Economics, Yale University.
  • Handle: RePEc:cwl:cwldpp:2069
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    Cited by:

    1. repec:eee:jeborg:v:150:y:2018:i:c:p:98-113 is not listed on IDEAS
    2. Florian Brugger & Joern Kleinert, 2017. "The strong increase of Austrian government debt in the Kreisky era: Austro-Keynesianism or just stubborn forecast errors?," Graz Economics Papers 2017-15, University of Graz, Department of Economics.
    3. Armenak Antinyan & Luca Corazzini & Elena D'Agostino & Filippo Pavesi, 2017. "Watch your Words: an Experimental Study on Communication and the Opportunity Cost of Delegation," Working Papers 18/2017, University of Verona, Department of Economics.
    4. Luis E. Arango & Javier Pantoja & Carlos Velásquez, 2017. "Effects of the central bank’s communications in Colombia. A content analysis," Borradores de Economia 1024, Banco de la Republica de Colombia.
    5. Gabriel Mathy & Herman O. Stekler, 2017. "Was the Deflation of the Depression Anticipated? An Inference Using Real-time Data," Working Papers 2017-004, The George Washington University, Department of Economics, Research Program on Forecasting.
    6. repec:eee:jeborg:v:148:y:2018:i:c:p:189-198 is not listed on IDEAS

    More about this item

    Keywords

    Economic fluctuations; Business cycles; Story; Meme; Epidemic; SIR model; Kermack and McKendrick; Multipliers; Bubbles; Depression of 1920; Profiteer; Great Depression; Stock market crash; 2008 financial crisis; Post-truth;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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