What is Shiller's theory of narrative economics?
My work on narrative economics posits that the spread of popular stories, or narratives, plays a crucial role in shaping economic events. These narratives can influence consumer behavior, investment decisions, and even policy responses, often more powerfully than purely rational analysis. Think of how a compelling story about a booming market can create a self-fulfilling prophecy, driving prices higher not just because of intrinsic value, but because everyone *believes* in the story.
Ask Robert J. Shiller the follow-up →