The Economist
"[Shiller] explores how the public’s subjective perceptions can shape economic trends. . . . A sensible and welcome escape from the dead hand of mathematical models of economics."
From the Publisher
"Finalist for the Best Book Published by a University Press, Digital Book World Awards"
"Longlisted for the getAbstract International Book Award"
Winner of the PROSE Award in Economics, Association of American Publishers
Co-Winner of the Gold Medal in Economics, Axiom Business Book Awards
One of the Financial Times' Best Books of 2019: Economics
One of Prospect's Best Economics Books of 2019
An Economist Book of the Year
"Mind-opening Business Books of 2019"
"One of Mint's Books of 2019 You Should Not Miss"
A Project Syndicate Best Read in 2019
Project Syndicate
"This book alone should be enough to convince readers that assumptions about “given” preferences and “rational” utility-maximizing actors are totally inadequate for predicting economic and social events."
Prospect
"Robert Shiller identifies the enduring stories that influence the way we think about the economy, which may influence our patterns of spending and saving, and therefore become self-fulfilling prophecies."
Kirkus Reviews
2019-08-04
An engaging scholarly study of the stories we tell about economic events—stories that go viral, for better or worse.
Bitcoin is the wave of the future, an anarchist challenge to national currencies meant to disguise the identity of those who hold stores of the "cryptocurrency." It's been valued at something around $300 billion. However, writes Nobel Prize-winning Yale economist Shiller (Finance and the Good Society, 2015, etc.), "Bitcoin has no value unless people think it has value, as its proponents readily admit." It attains value because it's surrounded by economic narratives, some erratic, some untrustworthy—of the sort that fuel classic bubbles: the mania of speculation that surrounded the South Sea Company, the mania for tulips, the fear-of-missing-out mania for being part of the future rather than the past. By the author's account, narratives are too often overlooked, so that "we need to incorporate the contagion of narratives into economic theory," recognizing them to be a driver of economic change, for good or ill. "Contagion" is a word used advisedly, for Shiller draws some of his models from epidemiology; his work also combines with the growing acknowledgment that people are often not the rational actors of classic economic theory. Accounting for narrative epidemics does not necessarily mean trying to counter them, though economic forecasts—the currently building sentiment that a major recession is about to hit, for example—are best used not to frighten but to warn, so that self-fulfilling-prophecy disasters do not in fact happen. Shiller locates one pioneering forecaster in the economist John Maynard Keynes, who warned—unsuccessfully—that placing heavy penalties on a defeated Germany after World War I would yield an even bloodier disaster powered by the thirst for vengeance. That narrative proved correct even if Ronald Reagan's anecdotal embrace of supply-side economics proved a sham even as his stories "touched off an intense public mandate for tax cutting."
Wonky but of immense value to economists and policymakers working on the behavioral side of the field.
