Narrative Economics

How Stories Go Viral and Drive Major Economic Events

By: Robert J. Shiller

Narrated by: Susan Osman, Robert J. Shiller - introduction

From Nobel Prize-winning economist and New York Times best-selling 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 best-selling 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.

©2019 Robert J. Shiller (P)2019 Princeton University Press

Shiller explains real economic behavior

Over my 50 years engaged in economic research, I have seen the profession gradually retreat from its insistence on rational economic behavior. Milestones along the way includes incomplete information, gaming behavior, and Prospect Theory. Now Schiller has taken us another big step towards establishing a scientific methods for evaluating the way that storytelling influences real economic behavior. This book is highly relevant to a world in which all sorts of information and misinformation gets spun into stories that influence economic and political behavior. Any missteps, such as the fuzzy and incomplete connection between artificial intelligence and narrative economics, are small in terms of the overall significance of this book.

Slow middle, picks up after

Really slows down a bit in the early middle, but if you power through it is a really useful book. Lots of the topics covered are timeless, and seem especially relevant today. (Viral spread of ideas anyone?)

Nothing new

I understand how this would be groundbreaking for economist, but it’s really nothing new for people in the humanities or social science...

Deep analysis that lacks practical use

I wish I’ve read this book while I was completing my bachelors, because this would have changed my perspective on economics as a science. I love how the author creatively shows that narratives have the ability to affect economic events. This book has a lot of details useful for people in United States, because the whole part three is dedicated to events that happened in the US, but the propositions of the book are useful for any market. The only reason I didn’t rate this as five out of five is because the book lacks practical application which I personally like seeing in the books related to story and narrative.

Patiently informative

I took Shiller’s Coursera and loved his style of teaching and thinking. This book seemed very original. It’s great to hear somewhere older and wiser remark on the arbitrary trends of today....bitcoin.