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

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Princeton University Press, 2020 - Business & Economics - 408 pages
"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 bestselling 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."--
 

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Contents

An Adventure in Consilience
12
Why Do Some Narratives Go Viral?
31
Diverse Evidence on the Virality of Economic Narratives
53
The Foundations of Narrative Economics
69
Seven Propositions of Narrative Economics
87
Recurrence and Mutation
107
Automation and Artificial Intelligence Replace
113
Frugality versus Conspicuous Consumption
136
Stock Market Bubbles
228
Boycotts Profiteers and Evil Business
239
The WagePrice Spiral and Evil Labor Unions
258
Future Narratives Future Research
271
Applying Epidemic Models
289
Theoretical Epidemic Paths
291
Notes
301
References
325

The Gold Standard versus Bimetallism
156
LaborSaving Machines Replace Many Jobs
174
Real Estate Booms and Busts
212

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About the author (2020)

Robert J. Shiller is a Nobel Prize-winning economist and the author of the New York Times bestseller Irrational Exuberance (Princeton), among many other books. He is Sterling Professor of Economics at Yale University and a regular contributor to the New York Times. Twitter @RobertJShiller

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