Is the economy driven by narratives?

Last week, I finished reading Robert Shiller’s book on “narrative economics”. It was published in 2019 and argued that economics should more often investigate narratives that drive the economy. He suggested that such narratives can be analyzed in a similar way as contagious diseases (this was before the coronavirus pandemic). In the book, he argues that economic facts are also driven by feelings. These feelings are in turn influenced by “economic narratives”, for instance, stories on how the economy works.

Highly recommended! It can be ordered at Princeton University Press or amazon. Here is the link:

Narrative Economics: How Stories Go Viral and Drive Major Economic Events