Narrative economics : how stories go viral & drive major economic events / Robert J. Shiller

Includes bibliographical references and index

Preface: what is narrative economics? -- Part I: The beginnings of narrative economics -- The bitcoin narratives -- An adventure in consilience -- Contagion, constellations, and confluence -- Why do some narratives go viral? -- The Laffer curve and Rubik's Cube go viral -- Diverse evidence on the virality of economic narratives -- Part II: The foundations of narrative economics -- Causality and constellations -- Seven propositions of narrative economics -- Part III: Perennial economic narratives -- Recurrence and mutation -- Panic versus confidence -- Frugality versus conspicuous consumption -- The gold standard versus bimetallism -- Labor-saving machines replace many jobs -- Automation and artificial intelligence replace almost all jobs -- Real estate booms and busts -- Stock market bubbles -- Boycotts, profiteers, and evil business -- The wage-price spiral and evil labor unions -- Part IV: Advancing narrative economics -- Future narratives, future research -- Appendix: Applying epidemic models to economic narratives

"Economists have long based their forecasts on financial aggregates such as price-earnings ratios, asset prices, and exchange rate fluctuations, and used them to produce statistically informed speculations about the future--with limited success. Robert Shiller employs such aggregates in his own forecasts, but has famously complemented them with observations about the influence of mass psychology on certain events. This approach has come to be known as behavioral economics. How can economists effectively capture the effects of psychology and its influence on economic events and change? Shiller attempts to help us better understand how psychology affects events by explaining how popular economic stories arise, how they grow viral, and ultimately how they drive economic developments. After defining narrative economics in the book's preface with allusions to the advent of both the Great Depression and to World War II, Shiller presents an example of a recent economic narrative gone viral in the story of Bitcoin. Next, he explains how narrative economics works with reference to how other disciplines incorporate narrative into their analyses and also to how epidemiology explains how disease goes viral. He then presents accounts of recurring economic narratives, including the gold standard, real estate booms, war and depression, and stock market booms and crashes. He ends his book with a blueprint for future research by economists on narrative economics"-- Provided by publisher