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鈥搘inning 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鈥攚hat he calls 鈥渘arrative economics鈥濃�攈as 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鈥攚hether 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鈥攖ransmitted by word of mouth, by the news media, and increasingly by social media鈥攄rive 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.
The stories people tell鈥攁bout economic confidence or panic, housing booms, the American dream, or Bitcoin鈥攁ffect economic outcomes. Narrative Economics explains how we can begin to take these stories seriously. It may be Robert Shiller’s most important book to date.
Awards and Recognition
- Finalist for the Best Book Published by a University Press, Digital Book World Awards
- Longlisted for the getAbstract International Book Award
- Winner of the PROSE Award in Economics, Association of American Publishers
- Co-Winner of the Gold Medal in Economics, Axiom Business Book Awards
- One of the Financial Times' Best Books of 2019: Economics
- One of Prospect's Best Economics Books of 2019
- An Economist Book of the Year
- Mind-opening Business Books of 2019
- One of Mint's Books of 2019 You Should Not Miss
- A Project Syndicate Best Read in 2019
"Shiller is one of the world鈥檚 most original economists. . . . Stories allow human beings to make sense of an uncertain world. But they also drive economies into booms and busts. Armed with this understanding, we gain a far richer understanding of how economies behave."鈥擬artin Wolf, Financial Times
"Shiller鈥檚 thorough discussion and many examples are certainly convincing as to the importance of narratives in individual economic decision-making and aggregate economic phenomena."鈥擲onia Jaffe, Science
"Economics is the study of people at work, but where are the people? Many a learned economist forgets all about them. Not Robert Shiller, the author of Narrative Economics, who believes that volatile human emotion counts for more than you think in the ostensibly objective valuation of stocks, bonds and buildings."鈥擩ames Grant, Wall Street Journal
"[Shiller] explores how the public鈥檚 subjective perceptions can shape economic trends. . . . A sensible and welcome escape from the dead hand of mathematical models of economics."鈥�The Economist
"A magisterial account . . . . In some ways . . . a bigger challenge to the foundations of economics than behavioral economics."鈥擲teve Denning, Forbes
"The idea that human behaviour can exert its own influence in the market is something that most traders would
buy into. . . . But in Narrative Economics, Shiller goes much broader and deeper, looking at how the stories we tell ourselves about the world drive our behaviour. . . . Economists, he argues, need to study this if they are to have any hope of doing a better job than they have in the past of predicting major events . . . and how people react to them."鈥擱ana Foroohar, Financial Times
"Provocative . . . . Especially timely in the current social media-obsessed era, because narratives鈥攂oth real and false鈥攃an spread globally with just a few swipes, affecting not just economic activity, but ultimately the balance of geopolitical power."鈥擬att Schifrin, Forbes
"Many economists argue that the US housing market and economy are still on solid foundations, but ignore
Shiller鈥檚 warnings at your peril. He rarely gets it wrong."鈥擳om Rees, The Telegraph
"Excellent."鈥擥illian Tett, Financial Times
"[Shiller aims] to identify the enduring narratives that influence the way we think about the economy, and may influence our patterns of spending and saving, and therefore become self-fulfilling prophecies . . . the results are fascinating, and sometimes startling."鈥擧oward Davies, Prospect
"Shiller argues forcefully."鈥擟hris Johns, Irish Times
"Any given scenario can allow for multiple narratives, both actual and potential. The question is why some prove more compelling than others. Shiller offers a range of answers, starting with the most obvious: a narrative is compelling when it is engaging and well expressed. Because his book is very well written, Shiller himself has satisfied this criterion."鈥擝arry Eichengreen, Project Syndicate
"Shiller has none of the salesman-like bluster of the stock pickers clamouring for attention on business
TV news . . . . As it is, he has only 40-odd years of being freakishly right about things. It will have to do."鈥擠avid Morris, Financial News
"Highly readable, compelling."鈥擲teve Levine, Medium
"The book is . . . good fun to read. It is full of amusing and apposite quotations, and interesting detail."鈥擟harles Goodhart, Central Banking Journal
"Shiller鈥檚 book is a spectacular effort at unifying distinct fields and encouraging the profession to be ever more capacious in its approach to phenomena and methodology."鈥擬ihir Desai, Times Higher Education
"What鈥檚 surprising, perhaps, is that the gearheads in academic economics departments may finally be getting wind of all this. If they are, much of the credit must go to Robert J. Shiller, the Yale economist who won the Nobel Prize in his field in 2013. Shiller鈥檚 iconoclastic new book, Narrative Economics, ranges across disciplines to explore the role of narratives in explaining (as the subtitle has it) 'how stories go viral and drive major economic events'."鈥擠aniel Akst, Strategy+Business
"This book about the economic significance of viral stories has a great potential to become a viral story itself."鈥擥谩bor Istv谩n B铆r贸, Metascience
"If we are going to win the war for reason and evidence, if we are going to stop humans from wiping out entire species and cities, economists and humanists are going to need to create more bridges across the disciplinary chasms. The proposal to focus on narratives and their powers is spot on. Robert Shiller gets us going."鈥擩eremy Adelman, Public Books
"This is a must read."鈥擵ivek Kaul, Mint
"The Nobel Prize-winning economist Robert Shiller defends the skills learned by English majors and other liberal arts graduates in his new book, Narrative Economics. Such graduates have highly developed critical-thinking and analysis skills in the narrative storylines that help people guide their way through complex personal and organizational relationships."鈥擟. Ronald Kimberling, The Hill
"Much of the book . . . . is an enjoyable and well-informed description of such narratives. I especially liked his discussion of bimetallism, wherein he shows that Brexit is not the first debate about an abstruse issue which triggered a culture war."鈥擟hris Dillow, Stumbling & Mumbling
"An engaging scholarly study of the stories we tell about economic events鈥攕tories that go viral, for better or worse . . . . Of immense value to economists and policymakers working on the behavioral side of the field."鈥�Kirkus Reviews
"[A] highly readable introduction to narrative economics . . . . Readers can readily identify with the examples
given in this book and will gain a much better understanding of the role of stories, especially in view of the speed of modern contagions."鈥擠avid Lorimer, Paradigm Explorer
"Narrative Economics is an eloquent and accessible exposition of a seductive idea. It鈥檚 a particularly compelling hypothesis."鈥擳im Jackson, Nature
"Narratives are important and enduring, as Professor Shiller鈥檚 entertaining book reminds us."鈥擠avid Smith, The Times
"This book alone should be enough to convince readers that assumptions about 鈥済iven鈥� preferences and 鈥渞ational鈥� utility-maximizing actors are totally inadequate for predicting economic and social events."鈥擪emal Dervi艧, Project Syndicate
"An uncannily prescient book for the current moment."鈥擟hris Taylor, Reuters
"By emphasizing narratives, Shiller aims to mount a fundamental challenge to standard economic thinking鈥攁nd to open up new territory for analysis. Narrative Economics was published before the novel coronavirus struck, but in a sense the
pandemic is an important point in his argument鈥檚 favor. . . . Shiller is right to suggest that narratives can be uniquely memorable and in铿倁ential, because they focus people鈥檚 attention and move their emotions in ways that abstractions usually do not."鈥擟ass R. Sunstein, New York Review of Books
"The subject deserved a treatise by a brilliant author, and Robert Shiller delivered. Economic science would benefit immensely if the ideas from this book were to go viral themselves."鈥擩osip Lucev, International Studies
"This is a fascinating and important book, written in an engaging style and packed with intriguing examples."鈥擠iane Coyle, University of Cambridge
"In this highly readable and entertaining book, Robert Shiller, extending the idea of contagious narratives with profound economic effects beyond stock-market and housing bubbles, ranges widely from old debates about the gold standard to the latest impacts of artificial intelligence. Narrative Economics contains a treasure of priceless quotations and examples and breaks new ground by tracing key words and phrases as they go viral and eventually fade away."鈥擱obert J. Gordon, New York Times bestselling author of The Rise and Fall of American Growth
"What causes the recurrent bubbles and busts in financial markets that create so much disruption in our lives? Economists have explored all sorts of possible causes, from subtle changes in monetary policy to the solar sunspot cycle. In this fascinating book, Robert Shiller argues that what really matters is a good story. Narrative economics, he argues, can explain what statistics miss, and shows how viral shifts in economic thinking resemble real epidemics."鈥擩ohn Quiggin, author of Economics in Two Lessons
"Ambitious and absorbing, Narrative Economics takes seriously the possibility that stories may have an economic life of their own, spreading through communities like epidemics, and it makes an extremely compelling case that studying such stories is important. The book is also a joy to read鈥攍ively, engaging, and accessible."鈥擱ajiv Sethi, Barnard College, Columbia University
