MICHEL PIREU: Popular narratives shape our shared investment sentiment
In the abstract to Narrative Economics, the paper he published earlier in 2017, Nobel prize-winning economist Robert Shiller points out that we have always been highly tuned towards narratives, whether factual or not, to justify ongoing actions, even such basic actions as spending and investing. "Stories motivate and connect activities to deeply felt values and needs," says Shiller. "Narratives ‘go viral’ and spread far, even worldwide, with economic impact. The 1920-21 Depression, the Great Depression of the 1930s, the Great Recession of 2007-09 and the contentious political-economic situation of today are considered the results of the popular narratives of their respective times. And though these narratives are deeply human phenomena that are difficult to study in a scientific manner, quantitative analysis may help us gain a better understanding of these epidemics in the future." Elsewhere in the paper Shiller suggests we consider "the possibility that sometimes the dominant reaso...
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