Sunday, January 19, 2020

Narrative Economics: How Stories Go Viral and Drive Major Economic Events (Robert J. Shiller)

The study of economics is often considered joyless, boring, and even “dismal” in some quarters, probably because much of its research and work deals with facts and figures. Unless you love facts and stats, economics may not be something that interests you even though we are all generally impacted by the economy at large. Economists have often been cast as boring and robotic by society over the years for bringing their numeric approach to life. Robert J. Shiller's Narrative Economics: How Stories Go Viral and Drive Major Economic Events hopes to change some of those perceptions. 

Shiller argues that the field of economics should increase its scope of data research to include stories that affect individual and societal economic behavior. His point is that pulling these narratives in will have the potential to improve predictions of future economic events, such as depressions and recessions, and help better prepare governments and businesses to deal with those events when they do occur. He also pulls in various stories from the 19th and 20th Centuries, both in good economic periods and bad, to help drive his points home that narratives can often influence, change, or even exacerbate what goes on around us. In an increasingly social age, Shiller believes that these narratives will provide valuable data going forward.

The book attempts to pull more of the "social" into the social science classification that economics falls into. I felt it was especially interesting in connecting the societal dots to events and that his arguments to utilize stories and narratives to help economists out in the future have value and merit. Narrative Economics is a bit technical and “in the weeds” at various times so I can’t recommend it as a casual read, but I do think those with an eye towards research, data, business, and social science work will gain some valuable insights.