Last Wednesday, Robert J. Shiller, Nobel Laureate for the empirical analysis of an asset, presented his Narrative Economics book, describing how global stories drive major economic events. I was fascinated by his Financial Markets Coursera series of lectures about the mechanics of finance in modern society, so I was glad to accept CFA UK invitation.
American economist, Robert J. Shiller once stated: ” I have also apparently tilted from most of my academic colleagues in choosing to devote some of my time to journalism, writing scholarly-trade books instead of purely scholarly books, and writing regular newspaper columns I believe that the experience of doing such diverse work has made me a better researcher even from a purely scholarly point of view, though I have to admit that others, with a different inspiration, may thrive more on specialization.”
Sterling Professor of Economics at Yale University and The New York Times bestselling author, Robert J. Shiller explained in granular details the difference between Narrative Economics and Behavioral Economics. Behavioral Economics tends to look for stable patterns of human economic behavior grounded in psychology, rather than Narrative economics looks at changes in human economic behavior over time, due to changes in popular narratives, changes in interpretations passed from person to person.
Nine important perennial economic narratives:
1. Panic versus Confidence
2. Frugality versus Conspicuous Consumption
3. The Gold Standard versus Bimetallism
4. Laborsaving Machines Replace Many Jobs
5. Automation and Artificial Intelligence Replace Almost All Jobs
6. Real Estate Booms and Busts
7. Stock Market Bubbles
8. Boycotts, Profiteers, and Evil Business
9. The Wage-Price Spiral and Evil Labor Unions
The term Technological unemployment that scares all of us, began way before the global web birth, and since then goes on the spiral span. According to Robert J. Shiller, the future of Narrative Economics will experience the new technology that affect contagion, recovery rates.
New data availability will digitized text and speech. New forms for economic theory will appear in economics. Collecting better information on popular economic narratives should start now as well.
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Referencing Bitcoin as a bubble, Robert Schiller contradicts cryptocurrency believers & traders. Online trends for Bitcoin start to grow this month again. Let’s see, if it’s a bubble or the new era. Cheers
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Great book about how the stories affect the economic decisions. World known perennial economical narratives are labor saving machines, automation and artificial intelligence that will drive unemployment and great depression signs of panic and bank runs. Highly recommended book
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Ultimately narratives are major vectors of rapid change in culture, in zeitgeist and in economic behavior.
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