Book Review: Narrative Economics by Robert J. Shiller ,MF F&D
Source details
- Canonical URL
- Book Review: Narrative Economics by Robert J. Shiller ,MF F&D
Other formats
Bibliographic details
- Authors: JONATHAN PORTES
- Published: March 1, 2020
Summary
- Reviewer: JONATHAN PORTES, professor of economics and public policy, King’s College London.
- Publication: F&D Magazine; Story Time; March 2020.
- Subject: Review of Robert J. Shiller, Narrative Economics: How Stories Go Viral & Drive Major Economic Events, Princeton University Press, Princeton, NJ, 2019, 377 pp., $27.95.
- Core thesis described: economic narratives—contagious stories—drive feelings, which in turn drive economic facts and decisions; narratives can help explain major economic episodes and shape expectations.
Main arguments presented by Shiller (as described by the reviewer)
- Economic facts are driven by feelings, and feelings are driven by economic narratives.
- Understanding narratives is necessary to comprehend and predict episodes like the Great Depression and the 1980s move toward personal tax cuts.
- Narratives can spread contagiously and change how people make economic decisions.
- Shiller advocates drawing from disciplines such as epidemiology and qualitative social research to study narratives.
Reviewer’s appraisal: strengths
- The book is entertaining and engaging in its storytelling (examples include the cult of frugality during the Great Depression, the mass adoption of blue jeans and jigsaw puzzles).
- The call for economists to draw from other disciplines is described as welcome.
Reviewer’s critique: limitations and concerns
- Causality: The reviewer questions Shiller’s causal claims—for example, that narrative dynamics “helps to explain the length and severity of the Depression”—calling such claims a stretch.
- Direction of causation: The reviewer asks why we should believe narratives caused the events rather than being driven by them or serving illustratively.
- Empirical support: There is “remarkably little reference to empirical evidence,” and none to recent literature on political uncertainty.
- Methodology and research agenda: Shiller’s approach is seen as assertion rather than analysis; the reviewer finds little guidance on how to turn the thesis into testable hypotheses or into mechanisms for predicting and avoiding downturns or crises.
- Implicit assumption: Shiller’s view rests on an asserted story of how people make economic decisions: “Ultimately, the mass of people whose decisions cause economic fluctuations aren’t very well-informed…and yet their decisions drive aggregate economic activity. It must be the case that attention-getting narratives drive those decisions.” The reviewer highlights that the “must” is assertion, not analysis.
Implications for research and policy (as inferred from the review)
- Interdisciplinary approaches to studying economic narratives are encouraged, especially integrating epidemiology and qualitative social research.
- Need for empirical testing: The reviewer emphasizes the importance of developing testable hypotheses and empirical evidence linking narratives to economic outcomes.
- Caution for policy: Claims that narratives alone can predict or prevent economic downturns are treated skeptically without clearer mechanisms and empirical validation.
F&D Magazine; March 2020; JONATHAN PORTES
Content in this bundle
- حان وقت القصص
- Book Review: Narrative Economics by Robert J. Shiller – IMF F&D
- Country Report
- Notes de lecture
- 《叙事经济学：故事如何传播并推动重大经济事件》 - 书 评 - 金融与发展 - 国际货币基金组织季刊 -2020年3月号·第57卷·第1期