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

Much of Shiller's new book is about how economic narratives form, spread, and fade. Drawing on medical evidence about the spread of infectious disease, Shiller argues that "economic fluctuations are substantially driven by contagion of oversimplified and easily transmitted variants of economic narratives. " But Shiller ignores the powerful role of monetary disorder, whether in forming the narrative or determining the contagion rate, or as a competitor to the narrative. Ignoring or downplaying money's role leaves Narrative Economics_ a disappointment.