Narrative Economics: How Stories Go Viral and Drive Major Economic Events

Robert J. Shiller

In Narrative Economics, Robert J. Shiller, Nobel prize-winning economist and best-selling author, explores the role of popular stories in shaping economic events. He argues that narratives (stories) can influence economic outcomes by affecting people's actions and decisions, from investing in the stock market to buying a house to voting for a particular political candidate.

Shiller draws on historical examples, such as the 1929 stock market crash and the recent housing bubble, to show how narratives can create "economic contagion" and lead to major financial crises.

He also examines the power of new technologies, like social media, in spreading and amplifying narratives, and how this can contribute to rapid economic change.

Ultimately, Shiller argues that understanding the narratives that drive economic events is essential for policymakers, investors, and anyone interested in understanding the workings of the economy. By identifying the stories that people are telling themselves about the economy, we can better predict and prevent economic crises.

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