Fluctuations in the world’s economies are largely due to the stories we hear and tell about them. These popular, emotionally relevant narratives sometimes inspire us to go out and spend, start businesses, build new factories and office buildings, and hire employees; at other times, they put fear in our hearts and impel us to sit tight, save our resources, curtail spending, and reduce risk. They either stimulate our “animal spirits” or muffle them.
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General Paper is all about the intriguing connections between the seemingly disparate areas and aspects of our lives. In this commentary Nobel laureate Robert J. Shiller explores the nexus between the pure art of narrative and the social science of economics.
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