Narrative economics by Robert Shiller

Narrative economics by Robert Shiller – How Stories Go Viral and Drive Major Economic Events – is such a fascinating book. Written by a Nobel Prize-winning economist, it is focused, as the name of the book suggests on how stories drive economic events, both positive and negative. He makes a comparison to epidemic viruses and the book was published in 2019, which is a bit ironic considering that now many of us are much more aware of how viruses transmit.

Narrative economics by Robert Shiller

Narrative economics means thinking of economic change also by studying popular stories that affect individual and collective economic behaviour. He argues that analysing this data can improve the ability to predict financial crisis. Stories are not just stories, people make choices because of them, so they matter.

Shiller makes very interesting points on how narratives are not well recorded and also not taken into account when it comes to thinking of things like economic crashes or the rise in Bitcoin. Newspapers, diaries are important because people decide to spend or not depending on what they feel is right and if most people are making the same choice it can either drive the economy forward or create recession. I found his views very interesting and it made me think. He points out the lack of data regarding these historical records and also the lack of research around it.

I highly recommend this book.

Narrative economics by Robert Shiller

Details about the picture: –
My rating: 5/5 Stars
Would I recommend it: yes
Published by: Princeton University Press
Year it was published: 2019
Format: Hardcover
Genre(s): Economics
Pages: 377

About the author: Robert James Shiller is an American economist, academic, and best-selling author. He currently serves as the Arthur M. Okun Professor of Economics at Yale University and is a Fellow at the Yale International Center for Finance, Yale School of Management. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since 1980, was Vice President of the American Economic Association in 2005, and President of the Eastern Economic Association for 2006-2007. He is also the co-founder and chief economist of the investment management firm MacroMarkets LLC.
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4 thoughts on “Narrative economics by Robert Shiller”

  • I am really trying so hard not to think about the economic fallout of the pandemic, as following on the heels of the 2008 market crash, we have yet again seen our pension devastated, only this time, with only a couple of years left until official retirement, there is no time left for us to wait for a recovery!!

    Always a fascinating subject for both of us, we tend to follow the economic news daily, so we probably end up by making ourselves more miserable than we should or could be! xx

    • If you like reading about finance, then you might be interested in this book. Taking into account how narratives impact the economy, by people buying/not buying because of what’s in the newspaper and on tv gives a much better understanding on what can happen. Although it’s not an exact science, as today I saw, again, that retail spending was up 9.2% and “better than economists had expected”. 🙂

    • It is a fascinating view and a really interesting book, but it’s not a very popular subject. 🙂

      Also… the beverage came to mind even before listening to the song. :))

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