## 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](https://www.imf.org/en/publications/fandd/issues/2020/03/book-review-narrative-economics-portes) ## Other formats - [Markdown version](/en/publications/fandd/issues/2020/03/book-review-narrative-economics-portes/index.md) - [Structured JSON version](/en/publications/fandd/issues/2020/03/book-review-narrative-economics-portes/index.json) - [Bundle manifest](/en/publications/fandd/issues/2020/03/book-review-narrative-economics-portes/bundle-manifest.json) ## 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** - [حان وقت القصص (Markdown version)](/-/media/files/publications/fandd/article/2020/march/ar/book3.pdf.md){rel="alternate" type="text/markdown"} - [حان وقت القصص (PDF)](/-/media/files/publications/fandd/article/2020/march/ar/book3.pdf){rel="external" type="application/pdf"} - **Book Review: Narrative Economics by Robert J. Shiller – IMF F&D** - [Book Review: Narrative Economics by Robert J. Shiller – IMF F&D (Markdown version)](/-/media/files/publications/fandd/article/2020/march/book-review-narrative-economics-portes.pdf.md){rel="alternate" type="text/markdown"} - [Book Review: Narrative Economics by Robert J. Shiller – IMF F&D (PDF)](/-/media/files/publications/fandd/article/2020/march/book-review-narrative-economics-portes.pdf){rel="external" type="application/pdf"} - **Country Report** - [Country Report (Markdown version)](/-/media/files/publications/fandd/article/2020/march/es/critica-libros-narrative-economics-portes.pdf.md){rel="alternate" type="text/markdown"} - [Country Report (PDF)](/-/media/files/publications/fandd/article/2020/march/es/critica-libros-narrative-economics-portes.pdf){rel="external" type="application/pdf"} - **Notes de lecture** - [Notes de lecture (Markdown version)](/-/media/files/publications/fandd/article/2020/march/fr/note-de-lecture-narrative-economics-portes.pdf.md){rel="alternate" type="text/markdown"} - [Notes de lecture (PDF)](/-/media/files/publications/fandd/article/2020/march/fr/note-de-lecture-narrative-economics-portes.pdf){rel="external" type="application/pdf"} - **《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** - [《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 (Markdown version)](/-/media/files/publications/fandd/article/2020/march/zh/book3.pdf.md){rel="alternate" type="text/markdown"} - [《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 (PDF)](/-/media/files/publications/fandd/article/2020/march/zh/book3.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2020/03/book-review-narrative-economics-portes_