31 Oct How Stories Drive Major Economic Events
#BehavioralScience & #NarrativeEconomics at #BX2019
Economists need to join forces with the English majors, according to economist (and Nobel laureate) Robert Shiller.
The economy is made up of living people, with stories, emotions, and ideas. Economics needs humanities, because economics isn’t worth much without understanding what it is to be human.
At BX2019, the international behavioral science conference last month in London (yes, we were there), Shiller talked about “narrative economics,” the subject and title of his latest book, released this month.
The humanities, says Shiller, are “relevant to understanding the real and human phenomenon of the economy, and its sudden and surprising changes.”
The art of narrative economics can advance the science of economics, Shiller says: What’s going on, what narratives do people think they are living under? What are the people in business saying? How about the taxi drivers? “To understand a complex economy, we have to take into account many conflicting popular narratives and ideas relevant to economic decisions, whether the ideas are valid or fallacious.”
“Ultimately it isn’t about the math. It’s about the stories economics tells about our lives.”
If economists would team up with experts in other disciplines, they could revolutionize their field. For instance, with literature. Appreciating great novels could improve economic models, because novels “bring us close to the essence of human experience.”
And history. Shiller says it was a 1931 book about the run-up to the 1929 stock market crash that showed him that “this period’s history of rapid-fire contagious narratives somehow contributed to the changing spirit of the times.” The trajectory of the economy seemed to be tied to the narratives of the period; but these narratives never entered economists’ mathematical models.
Shiller wants to change that.
Read his book: Narrative Economics: How Stories Go Viral & Drive Major Economic Events.
Here’s a collaboration of a literature scholar and an economist: Cents and Sensibility, by Gary Saul Morson and Morton Schapiro.
Why we still need English majors (be an interesting person—read great books!).
What economists can learn from English majors.
The value of the humanities in writing code.
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