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Narrative Economics

Introduce

Compared with social sciences such as psychology and political science, economics first uses quantitative indicators to study the problem of resource allocation to judge the trend of the economic situation. For example, GDP (Gross Domestic Product) reflects the national production level and economic situation. CPI (Consumer Price Index) is an important indicator to measure the inflation rate. Quantitative indicators have transformed economics, a discipline that studies social theory, into a science, but at the same time, the development of economics has also continuously demonstrated the importance of quantitative research. But economics is not just a game of numbers. Economic stories will have their advantages and disadvantages because of the different narrative methods in the process of communication. The core idea addressed by Robert J. Shiller in this Narrative of economics is that narrative communication is a very important mechanism of economic change and a key predictor. In short, the economic operation mechanism should not be completely based on the assumption of rational people and complete information, but should pay more attention to people's perceptual cognition.

Background

In the 2020s, the advancement of science and technology has provided human beings with more means of cognition of the world, and the depth and breadth of understanding have broadened. With the change of social structure, human beings have entered a diversified and information-based postmodern society. . The concept of narration came into being in this era. The word narration does not stop at the elaboration of the story but is more the result of the combination of history, culture, the spirit of the times, individual choices, and even more of a collective empathy. The core of narrative economics is that the analysis of the economy should take the perspective of a participant rather than a bystander, remove the sense of division of the times, take important events in the era as the background, and take people's complex and changing beliefs as research. The core is to bring the deep social psychological factors and emotional factors behind the facts into the perceptible category. To understand the narrative is to understand the universal value recognition, to obtain the ability to truly understand the economic operation mechanism.

Points

Emotion

The point of the narrative is people. The sum of human social relations, and emotions are the ties of social relations. Robert J. Shiller mentioned that humans always tend to tell self-reinforcing stories. This is a kind of self-identification, and it also means that people's subjective initiative also exists in economics. Economics is no longer a game of numbers. A narrative method rich in human emotion is like a catalyst. Through the mutual borrowing of society, countries, organizations and independent individuals, it has a huge public opinion orientation on the economic situation. This narrative spread is characterized by spontaneity, randomness, and universality. At the same time, with the change of times and theoretical progress, people have a threshold for accepting narrative:

     
  1. Interdisciplinary: The output party of information is required to have a multidisciplinary knowledge base in order to straighten out the logic of a story
    2.  
  2. Narrative: Listeners prefer a more vivid, accessible and intense story
    3.  
  3. Effective narrative: People are not only satisfied with the content, but also expect the actual return of a story, or the sublimation of meaning
    4.  

Cycle

Economic narratives are long-memory and cyclical, which means that narratives recur and mutate over time. There is a high probability that the events that have happened will form new topics after a period of time, through the combination of different people and background narratives of different times. The dissemination power of economic narrative depends on the repetition probability. For example, the stories and verses mentioned in the classroom during the student period, because of repeated learning from generation to generation, eventually formed a far-reaching culture.

liberalism&Anarchism

The occurrence and dissemination of narrative will be guided by potential factors. A prime example of an economic narrative is the Bitcoin narrative, whose popularity is precisely the result of liberal and anarchist ideas. Liberalism and anarchism just reflect the mainstream thinking of the current era, and narrative is the mapping channel of thinking, which can accurately show the changing process of thinking of the times. In particular, the information brought by narrative dissemination cannot be kept true, just think that human emotions are the product of impulse, and economic narratives are full of false and redundant information, but they truly feedback the process of change. Gradually relax history, time will prove the correctness of the law.

Conclusion

The book Narrative of economics taught me that storytelling is a skill. How to present a story beautifully to the world, and give things an influence beyond itself.