Narrative Economics How Stories Go Viral and Drive Major Economic Events

Nobel Prize-winning economist Robert Shiller introduces a new framework for understanding economic fluctuations by examining the powerful influence of popular stories. He argues that widely circulated narratives, whether factual or not, profoundly shape human behavior and, consequently, drive major economic events such as financial crises, recessions, and market booms.

Narrative Economics demonstrates how contagious tales about everything from housing prices to technological revolutions, spread through word of mouth, news media, and social platforms, can go viral and move markets by influencing our decisions about spending, saving, and investing. By integrating the study of these compelling narratives into economic theory, Shiller offers a fresh perspective on how to better anticipate and prepare for significant economic shifts, providing crucial insights into the mechanisms of economic change.