Summary of Narrative Economics

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Narrative Economics summary

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The field of economics lags considerably behind other social sciences, such as history, anthropology and sociology, in understanding the ways narratives affect human thoughts and actions. Noted economist Robert J. Shiller explains the large-scale ramifications and detailed nuances of “narrative economics,” and how stories about an economic event – perhaps tales of the Great Depression or accounts of asset bubbles – may contribute to financial disruption. getAbstract recommends his erudite report to economists and historians interested in a sweeping discussion of the arc of narrative and its impact on economies. 

In this summary, you will learn

  • What the term “narrative economics” describes,
  • How economists can use stories in their profession, and
  • Why narratives are important for understanding economic conditions and policies.
 

About the Author

Nobel laureate Robert J. Shiller is a professor of economics and finance at Yale University.

 

Summary

Financial events can fuel stories that often transcend the economic facts. The explanation people create or latch onto to help them make sense of their environment can “go viral” if the story “maintains a core contagious element.” The discipline of “narrative economics” provides an approach by which economists can understand how these accounts begin, evolve and live on, while offering a quantitative resource for determining how these tales affect actual economic conditions and influence policy making.

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