Powerful ideas from top nonfiction
Try Blinkist to get the key ideas from 7,000+ bestselling nonfiction titles and podcasts. Listen or read in just 15 minutes.
Start your free trial
Blink 3 of 8 - The 5 AM Club
by Robin Sharma
Listen to the Intro
Narrative Economics summary
Robert J. Shiller
How Stories Go Viral and Drive Major Economic Events
25 mins
Table of Contents
Narrative Economics
Summary of 8 key ideas
Audio & text in the Blinkist app
Key idea 1 of 8
Narrative economics considers the collective stories that change economic behavior.
When you watch an economist on TV, you’ll notice that they’ll nearly always speak in figures. You’ll hear them use terms like “GDP” or “inflation” describing a past stock-market crash or an impending recession.
In an economist’s world, it can often seem as if the economy lives independently from the rest of the world, on a purely numerical plane. Economists rarely, if ever, try to explain the economy by referring to people’s fears, hopes, or prejudices. And they’ll often leave out our messy human stories, which are just as crucial to understanding big economic events. That’s where narrative economics come in.
The key message here is: Narrative economics considers the collective stories that change economic behavior.
First, to understand the phrase “narrative economics,” we need to consider the modern use of the word narrative.
Rather than simply referring to something with a beginning, middle, and end, a narrative can describe a collective story or belief shared by a group of people. Take the “shrewd businessman,” a popular narrative in the United States. In fact, Donald Trump capitalized on it to appeal to voters. Whether or not Trump is a shrewd businessman doesn’t matter – he successfully hitched himself to this narrative and played up his credentials as a tough, wily operator who’d get the best deal for the country.
And, of course, that particular narrative had a real effect. It helped Donald Trump get elected president.
Now, take the stock-market crash of 1929. In the years before the crash, there were lots of popular narratives flying around. There were stories of ordinary people gambling all of their savings on a particular stock and becoming enviably rich. Of course, this led more and more people to make bad investments, culminating in the big crash on October 24, 1929.
Narratives should form part of our understanding of any big economic event, but often, they don’t. While economists have rarely focused on stories, there has been one notable exception – Cambridge economist John Maynard Keynes. Rather than simply refer to figures, Keynes made a note of public feelings at play. In his book Economic Consequences of the Peace, he predicted that Germany would become deeply embittered by the heavy reparations they were required to pay after World War One. No purely quantitative analysis could’ve told us that.
Want to see all full key ideas from Narrative Economics?
Key ideas in Narrative Economics
More knowledge in less time
Read or listen
Get the key ideas from nonfiction bestsellers in minutes, not hours.
Find your next read
Get book lists curated by experts and personalized recommendations.
Shortcasts New
We’ve teamed up with podcast creators to bring you key insights from podcasts.
What is Narrative Economics about?
Narrative Economics (2019) describes how popular narratives influence the way economies behave. From Bitcoin’s sudden rise to stock-market crashes, Narrative Economics looks beyond the statistics to the collective human stories that drive these events.
Best quote from Narrative Economics
The concept sounds like something that most people would find dull and boring. But, somehow, the Laffer curve went viral.
—Robert J. Shiller
Who should read Narrative Economics?
- Financial analysts looking to broaden their horizons
- Forecasters of any kind
- Anyone interested in the economy and global events
Categories with Narrative Economics
Books like Narrative Economics
People ❤️ Blinkist
Sven O.
It's highly addictive to get core insights on personally relevant topics without repetition or triviality. Added to that the apps ability to suggest kindred interests opens up a foundation of knowledge.
Thi Viet Quynh N.
Great app. Good selection of book summaries you can read or listen to while commuting. Instead of scrolling through your social media news feed, this is a much better way to spend your spare time in my opinion.
Jonathan A.
Life changing. The concept of being able to grasp a book's main point in such a short time truly opens multiple opportunities to grow every area of your life at a faster rate.
Renee D.
Great app. Addicting. Perfect for wait times, morning coffee, evening before bed. Extremely well written, thorough, easy to use.
People also liked
Start growing with Blinkist now
28 Million
Downloads on all platforms
4.7 Stars
Average ratings on iOS and Google Play
91%
Of Blinkist members create a better reading habit*
*Based on survey data from Blinkist customers