Narrative Economics: How Stories Go Viral and Drive Major Economic Events
(Libby/OverDrive eAudiobook)

Nobel laureate Robert Shiller (Yale) hopes to remake economics, to improve the ability to anticipate and deal with major economic events, especially bad ones, by adding "narratives" to economists' toolkit. Narratives allow one to tap into public sentiment. They are the stories and representations that people use to explain and justify accounts of society. These stories are explanations, theories, or even jokes and songs that have emotional resonance and can easily be conveyed in casual conversation. Pressing economists to take a more humanistic approach by looking at what ordinary people say, Shiller seeks to create a bridge between economics and sociology, anthropology, psychology, neuroscience, and literary studies. Many chapters are interesting and insightful--especially those on Bitcoin, the gold standard, and the Depression--showing that narratives can help explain historical events. Other chapters grapple with popular narratives concerning labor-saving machines, AI, and real-estate/stock-market booms and busts. That said, many economists will be wary of Shiller's approach because, even with hindsight, understanding why some ideas spread like "epidemics" is almost impossible. To these readers Shiller's narratives will seem unhelpful, like just--so stories that are too anecdotal and impossible to meaningfully quantify or model. Summing Up: Recommended. With the above caveat. Lower-division undergraduates through faculty and professionals; general readers. --Robert M. Whaples, Wake Forest University

An engaging scholarly study of the stories we tell about economic eventsstories that go viral, for better or worse.Bitcoin is the wave of the future, an anarchist challenge to national currencies meant to disguise the identity of those who hold stores of the "cryptocurrency." It's been valued at something around $300 billion. However, writes Nobel Prize-winning Yale economist Shiller (Finance and the Good Society, 2015, etc.), "Bitcoin has no value unless people think it has value, as its proponents readily admit." It attains value because it's surrounded by economic narratives, some erratic, some untrustworthyof the sort that fuel classic bubbles: the mania of speculation that surrounded the South Sea Company, the mania for tulips, the fear-of-missing-out mania for being part of the future rather than the past. By the author's account, narratives are too often overlooked, so that "we need to incorporate the contagion of narratives into economic theory," recognizing them to be a driver of economic change, for good or ill. "Contagion" is a word used advisedly, for Shiller draws some of his models from epidemiology; his work also combines with the growing acknowledgment that people are often not the rational actors of classic economic theory. Accounting for narrative epidemics does not necessarily mean trying to counter them, though economic forecaststhe currently building sentiment that a major recession is about to hit, for exampleare best used not to frighten but to warn, so that self-fulfilling-prophecy disasters do not in fact happen. Shiller locates one pioneering forecaster in the economist John Maynard Keynes, who warnedunsuccessfullythat placing heavy penalties on a defeated Germany after World War I would yield an even bloodier disaster powered by the thirst for vengeance. That narrative proved correct even if Ronald Reagan's anecdotal embrace of supply-side economics proved a sham even as his stories "touched off an intense public mandate for tax cutting."Wonky but of immense value to economists and policymakers working on the behavioral side of the field. Copyright Kirkus Reviews, used with permission.