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The storied state of economics: Review of Robert Shiller’s Narrative Economics

Robert Shiller’s new book probes how social behaviour trumps statistics in determining the fate of economies—Tim Jackson weighs it up. This article was written for Nature.

by TIM JACKSON
© akinbostanci / iStock / Getty Images

“Economists are tellers of stories and makers of poems,” wrote the economic historian Deidre McCloskey in 1990. It’s a curious observation for a profession that prides itself on hard-nosed, quantitative analysis and strives continually for predictive power. The Nobel-prizewinning economist Robert Shiller goes even further.

Stories are more powerful than statistics, he claims. The irrationality inherent in financial exuberance (and despair) defies the neat territory of numbers and demands a deeper excursion into the decidedly unruly world of narratives. That is the declared aim of his book Narrative Economics.

It’s a compelling hypothesis…. Read in full on the Nature website .

Link

Further Reading

Earlier in 2019, the UK Treasury Select Committee launched an inquiry into the decarbonisation of the UK economy and green finance, set out to scrutinise the role of the Treasury department, regulators and financial services firms in supporting the UK Government’s climate change commitments. Drawing on recent CUSP reports, Tim Jackson, Aled Jones and the Aldersgate Group submitted evidence.
Earlier in 2019, the UK Treasury Select Committee launched an inquiry into the decarbonisation of the UK economy and green finance, set out to scrutinise the role of the Treasury department, regulators and financial services firms in supporting the UK Government’s climate change commitments. Drawing on recent CUSP reports, Tim Jackson, Aled Jones and the Aldersgate Group submitted evidence.
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Zero Carbon Sooner —The case for an early zero carbon target for the UK
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This briefing paper summarises the dilemma associated with using mainstream, macroeconomic models to guide disruptive, transformative change such as those that might occur under ‘deep decarbonisation’: a rapid transition to a net-zero carbon economy. Some form of macro-economic modelling framework is essential to enable policy-makers to exercise short- and long-term fiscal responsibility. Incremental models based on historical behaviour, however, are a poor guide to outcomes under circumstances of disruptive change.
This briefing paper summarises the dilemma associated with using mainstream, macroeconomic models to guide disruptive, transformative change such as those that might occur under ‘deep decarbonisation’: a rapid transition to a net-zero carbon economy. Some form of macro-economic modelling framework is essential to enable policy-makers to exercise short- and long-term fiscal responsibility. Incremental models based on historical behaviour, however, are a poor guide to outcomes under circumstances of disruptive change.
Economy
Finance
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