IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwedp/201918.html
   My bibliography  Save this paper

Markets are a function of language: Notes on a narrative economics

Author

Listed:
  • Holmes, Douglas R.

Abstract

Narratives are under-theorised and until recently under-recognised as core variables influencing the speed and direction of changes in expectations and, therefore, as core macroeconomic variables that shape the policy processes of central banks. The author examines below how the thousands of micro-level narratives garnered on a regular basis by the Bank of England's staff of regional agents can inform what Ricardo Reis and Alan Blinder (Understanding the Greenspan standard, 2005) term the "macroeconomic allegories" that influence monetary policy decision-making. The contacts that make up the "network" perform descriptive, explanatory, and interpretive labor in situ putting words both to the ephemera of local expectations across the UK and to the rapidly changing competitive pressures unfolding in global markets. Internal studies have demonstrated that the micro-level narratives collected and scored by the agents provide the most reliable information on the future course of the British economy of any of the projections or forecasts available to the Bank.

Suggested Citation

  • Holmes, Douglas R., 2019. "Markets are a function of language: Notes on a narrative economics," Economics Discussion Papers 2019-18, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:201918
    as

    Download full text from publisher

    File URL: http://www.economics-ejournal.org/economics/discussionpapers/2019-18
    Download Restriction: no
    File URL: https://www.econstor.eu/bitstream/10419/193181/1/1066776784.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fabian Muniesa & Michel Callon, 2007. "Economic experiments and the construction of markets," Post-Print halshs-00177935, HAL.
    2. Alan S. Blinder & Ricardo Reis, 2005. "Understanding the Greenspan standard," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 11-96.
    3. Bronk,Richard, 2009. "The Romantic Economist," Cambridge Books, Cambridge University Press, number 9780521735155.
    4. Benjamin M. Friedman, 2002. "The Use and Meaning of Words in Central Banking: Inflation Targeting, Credibility, and Transparency," NBER Working Papers 8972, National Bureau of Economic Research, Inc.
    5. Donald MacKenzie, 2006. "An Engine, Not a Camera: How Financial Models Shape Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262134608, December.
    6. McCloskey,Deirdre N., 1994. "Knowledge and Persuasion in Economics," Cambridge Books, Cambridge University Press, number 9780521436038.
    7. Alan S. Blinder & Ricardo Reis, 2005. "Understanding the Greenspan standard," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 11-96.
    8. Bronk,Richard, 2009. "The Romantic Economist," Cambridge Books, Cambridge University Press, number 9780521513845.
    9. Morgan,Mary S., 2012. "The World in the Model," Cambridge Books, Cambridge University Press, number 9781107002975.
    10. Morgan,Mary S., 2012. "The World in the Model," Cambridge Books, Cambridge University Press, number 9780521176194.
    11. McCloskey,Deirdre N., 1994. "Knowledge and Persuasion in Economics," Cambridge Books, Cambridge University Press, number 9780521434751.
    12. Brunner, Karl & Meltzer, Allan H, 1971. "The Uses of Money: Money in the Theory of an Exchange Economy," American Economic Review, American Economic Association, vol. 61(5), pages 784-805, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Carbonero & Jeremy Davies & Ekkehard Ernst & Sayantan Ghosal & Leaza McSorley, 2021. "Anxiety, Expectations Stabilization and Intertemporal Markets: Theory, Evidence and Policy," Working Papers 2021_12, Business School - Economics, University of Glasgow.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ramzi Mabsout, 2018. "The Backward Induction Controversy as a Metaphorical Problem," Economic Thought, World Economics Association, vol. 7(1), pages 24-49, March.
    2. Oswin Krüger Ruiz, 2020. "The Self According to Others: Explaining Social Preferences with Social Approbation," Economic Thought, World Economics Association, vol. 9(2), pages 38-54, December.
    3. Kristin Asdal & Béatrice Cointe, 2022. "Writing good economics: how texts 'on the move' perform the lab and discipline of experimental economics," Post-Print hal-03429169, HAL.
    4. Bronk, Richard & Beckert, Jens, 2022. "The instability of preferences: Uncertain futures and the incommensurable and intersubjective nature of value(s)," MPIfG Discussion Paper 22/1, Max Planck Institute for the Study of Societies.
    5. Lasse F. Henriksen, 2013. "Economic models as devices of policy change: Policy paradigms, paradigm shift, and performativity," Regulation & Governance, John Wiley & Sons, vol. 7(4), pages 481-495, December.
    6. Herrmann-Pillath, Carsten, 2008. "The naturalistic turn in economics: implications for the theory of finance," Frankfurt School - Working Paper Series 105, Frankfurt School of Finance and Management.
    7. David Dequech, 2016. "Some Institutions (Social Norms And Conventions) Of Contemporary Mainstream Economics, Macroeconomics, And Financial Economics," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 006, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Bronk, Richard & Beckert, Jens, 2019. "Uncertain futures: imaginaries, narratives and calculative technologies," LSE Research Online Documents on Economics 103091, London School of Economics and Political Science, LSE Library.
    9. Kui-Wai Li, 2013. "The US monetary performance prior to the 2008 crisis," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3450-3461, August.
    10. Ioana Negru, 2013. "Revisiting the Concept of Schools of Thought in Economics: The Example of the Austrian School," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(4), pages 983-1008, October.
    11. Claus Dierksmeier, 2011. "The Freedom–Responsibility Nexus in Management Philosophy and Business Ethics," Journal of Business Ethics, Springer, vol. 101(2), pages 263-283, June.
    12. Graupe, Silja & Steffestun, Theresa, 2018. ""The market deals out profit and losses": Wie ökonomische Standardlehrbücher das unreflektierte Denken in Metaphern fördern," Working Paper Serie des Instituts für Ökonomie Ök-38, Hochschule für Gesellschaftsgestaltung (HfGG), Institut für Ökonomie.
    13. McCloskey Deirdre Nansen, 2018. "The Two Movements in Economic Thought, 1700–2000: Empty Economic Boxes Revisited," Man and the Economy, De Gruyter, vol. 5(2), pages 1-20, December.
    14. Kenneth N. Kuttner & Adam S. Posen, 2010. "Do Markets Care Who Chairs the Central Bank?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(2‐3), pages 347-371, March.
    15. Michael Patrick Curran & Matthew J. Fagerstrom, 2019. "Monetary Growth and Financial Sector Wages," Villanova School of Business Department of Economics and Statistics Working Paper Series 41, Villanova School of Business Department of Economics and Statistics.
    16. N. Neil K. Khettry & Loretta J. Mester, 2006. "Core inflation as a predictor of total inflation," Research Rap Special Report, Federal Reserve Bank of Philadelphia, issue Apr.
    17. Gustav A. Horn & Heike Joebges & Lothar Kamp & Alexandra Krieger & Sebastian Sick & Silke Tober, 2009. "Gesamtwirtschaftliche Stabilität durch bessere Regulierung - Vorschläge für eine Neuordnung der Finanzmärkte," IMK Report 36-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    18. Gunther Schnabl, 2012. "Monetary Policy Reform in a World of Central Banks," Global Financial Markets Working Paper Series 26-2012, Friedrich-Schiller-University Jena.
    19. Rod O'Donnell, 2006. "Keynes's Principles of Writing (Innovative) Economics," The Economic Record, The Economic Society of Australia, vol. 82(259), pages 396-407, December.
    20. Wakamatsu, Naoyuki, 2020. "On Ricardo’s Multilayered Method: Wage Taxation and Foreign Subsidies Considered," MPRA Paper 103531, University Library of Munich, Germany.

    More about this item

    Keywords

    central banks and their policies; role and effects of psychological; emotional; social; and cognitive factors on the macro economy;
    All these keywords.

    JEL classification:

    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwedp:201918. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.