Narrative Economics
Abstract
This address considers the epidemiology of narratives relevant to economic fluctuations. The human brain has always been highly tuned toward narratives, whether factual or not, to justify ongoing actions, even such basic actions as spending and investing. Stories motivate and connect activities to deeply felt values and needs. Narratives “go viral” and spread far, even worldwide, with economic impact. The 1920–1921 Depression, the Great Depression of the 1930s, the so-called Great Recession of 2007–2009, and the contentious political-economic situation of today are considered as the results of the popular narratives of their respective times. Though these narratives are deeply human phenomena that are difficult to study in a scientific manner, quantitative analysis may help us gain a better understanding of these epidemics in the future. (JEL D72, E32, G01, N10)
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Social scientists and psychologists have long emphasized the role that stories play in collective action-driving the formation and dynamics of nations, religions, hunter-gatherer communities, organizations, cultural groups, and even financial markets.
“Social scientists and psychologists have long emphasized the role that stories play in collective action—driving the formation and dynamics of nations (Tilly, 2002), religions (Dunbar, 2022), hunter-gatherer communities (D. Smith et al., 2017; Sugiyama, 2001), organizations (Boje, 2008), cultural groups (Michalopoulos & Xue, 2021), and even financial markets (Shiller, 2017).”
From Stories in Action. (2022) · cites this paper as Shiller, 2017
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- Authors
- Shiller, R. J.
- Affiliations
- Yale University (US)
- Corresponding author
- Shiller, Robert J.
- ORCID
- Shiller, Robert J.
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2017-04-01
- Volume
- 107
- Issue
- 4
- Pages
- 967-1004
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W4233731957
- Cited by
- 1,004
- References
- 60
- Citations by year
- 2026: 185 · 2025: 148 · 2024: 112 · 2023: 118 · 2022: 110 · 2021: 140 · 2020: 84 · 2019: 51 · 2018: 35 · 2017: 18 · 2016: 1 · 2015: 1
- FWCI
- 120.79
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Economic Review (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic theories and models
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
- Keywords
- narrative economics, economic narratives, business cycles, Great Depression, Great Recession, behavioral economics, economic psychology, political economy
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
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