The influence of narratives on economic decisions: Understanding the relationship between stories and the economy is crucial for a comprehensive view of economic phenomena and the human condition. Neglecting narratives can lead to a narrow perspective.
The stories and narratives we create and believe play a significant role in shaping our economic decisions and the overall health of the economy. The Dutch tulip mania of the 1630s, where people invested heavily in tulips, believing they held great symbolic value, is an example of how narratives can influence economic behavior. Economist Robert Schiller argues that understanding the relationship between stories and the economy is crucial, and his new book, "Narrative Economics," explores this idea. Schiller, a Nobel Prize winner in economics, believes that by integrating perspectives from various fields, including history, psychology, and sociology, we can gain a more comprehensive understanding of economic phenomena and the human condition. Neglecting the role of narratives in economics can lead to a narrow and incomplete view of economic life.
The allure of Bitcoin's creator and the FOMO effect: The unknown identity of Bitcoin's creator and the FOMO phenomenon fueled Bitcoin's popularity and massive value increase, demonstrating the power of collective belief and the viral effect.
The mystery and intrigue surrounding the creation of Bitcoin played a significant role in its widespread adoption and massive increase in value. The unknown identity of Satoshi Nakamoto, the pseudonymous creator of Bitcoin, added an element of surprise and excitement that induced fear of missing out (FOMO) among people, leading them to invest in the cryptocurrency. The buzz around the terms "Bitcoin" and "blockchain" became magnets for investment, even among those who didn't fully understand the underlying technology. The value of Bitcoin, which started at zero, reached over $300 billion, demonstrating the power of collective belief and the viral effect. While some compare Bitcoin to gold due to its lack of intrinsic value, there are differences – gold is scarce and has a long history and cultural significance, whereas anyone can create a new cryptocurrency.
Narratives and Beliefs about Value Fuel Economic Systems: Understanding narratives and underlying psychological/sociological factors can explain origins and spread of economic fads, as well as their eventual decline.
Our economic systems, including money and banking, are built on shared narratives and beliefs about value. These narratives give power to things like paper money and digital currencies, and they can spread and persist like viruses or parasites, fueled by contagion and influenced by underlying social and psychological factors. For example, Bitcoin tapped into deep narratives about anarchy, populism, and disrupting elites, which helped explain its rapid rise in popularity. Understanding these narratives and the underlying psychological and sociological factors can help explain the origins and spread of economic fads, as well as their eventual decline.
Understanding the contagion and recovery rates of stories: People's perception of a story's impact and relevance determines its spread and longevity. Understanding this can help shape societal outcomes.
Stories, much like viruses or economic trends, have contagion and recovery rates. The contagion rate refers to how quickly a story spreads, while the recovery rate refers to how long it remains relevant. The choice to share a story depends on our perception of how others will react, a concept known as theory of mind. People have been going viral with stories for thousands of years, not just in the digital age. The 1920s and 30s saw a powerful story about technological unemployment and fear of job loss due to innovations. This story, which echoes our own time, highlights the importance of understanding how people perceive and react to stories, as it can significantly impact societal outcomes.
The resurfacing of economic narratives: Economic narratives can change and reappear, often due to mutations or new presentations, but can have significant impacts on policy decisions
Stories, much like pathogens, can disappear and reappear over time. The resurfacing of a story can be attributed to various factors, including mutations or changes in practices. For instance, the narrative of trickle-down economics, which advocated for tax cuts for the rich to boost economic growth, had lost its appeal by the 1970s. However, a new narrative emerged in the form of the Laffer curve, which presented the same theory in a visually appealing way. This new narrative, bolstered by the use of a diagram drawn on a napkin and the association with influential figures, led to significant policy changes in the late 1970s and 1980s in both the UK and the US. The Laffer curve, which suggests that there are always two tax rates to raise a given amount of revenue, became a viral idea that transformed economic policy worldwide.
The Laffer Curve: Optimal Tax Rates and Government Revenue: The Laffer Curve, a theory on tax rates and government revenue, suggests potential optimal tax rates where revenue remains constant with lower tax burdens. Its significance lies in extreme tax rates, but its applicability to real-world taxation is debated.
The Laffer Curve, a theoretical representation of the relationship between tax rates and government revenue, suggests that there may be optimal tax rates where the government raises the same amount of revenue with lower tax burdens on citizens. However, the story of its discovery through a napkin at a restaurant, popularized by Arthur Laffer, has been debunked. The curve's implications are most significant at extreme tax rates, but its applicability to real-world taxation levels is debated. In the 1980s, this theory, along with anecdotes like Reagan's "welfare queen" story, influenced policy changes, leading to lower tax rates and reduced government spending. Despite controversies, the Laffer Curve remains a significant concept in economics.
The Power of Storytelling: Spreading Truth or Falsehood?: Storytelling can influence individuals, companies, and nations, sometimes spreading false information. Critically evaluating information is crucial to distinguish truth from fiction.
The power of storytelling can significantly impact individuals, companies, and even nations, often spreading false information in the process. Reagan's joke about the Soviet Union's inefficiencies was an effective way to criticize communism without explicitly stating it. However, the origin of the story might not be accurate, and stories can go viral when connected to famous figures. The issue of false information is not new, and the current economic expansion's impending end is a popular concern, with some predicting a severe recession. While a recession is inevitable, the real question is whether the next one will be severe or not. The power of storytelling, whether true or false, can shape public opinion and behavior, making it essential to approach information critically.
Economic narratives shape perceptions and behaviors: Narratives, whether factual or not, can significantly influence economic events by shaping perceptions and behaviors
Economic narratives, or stories, can significantly impact economic reality. Robert Shiller, the Nobel Prize-winning economist and author of "Narrative Economics," explains that stories have the power to shape perceptions and behaviors, leading to major economic events. For instance, the narrative around Japan's "lost decade" in the 1990s influenced people's beliefs and spending habits. Similarly, President Trump's positive economic narrative, as well as his advice to spread personal narratives aggressively, can influence people's perceptions and behaviors. While the veracity of these narratives may not be the point, they can still have a profound impact on the economy.
The Talk Market
Recent Episodes from Hidden Brain
You 2.0: Fighting Despair
Every morning, you wake up and face the world. What does it look like to you? Do you see a paradise of endless opportunities, where people are friendly and helpful? Or a world filled with injustice, where people cannot be trusted? In the final installment of this year's You 2.0 series, we talk with psychologist Jamil Zaki about how we become disillusioned and distrustful of the world, and how to balance realism with hope.
Did you miss any of the other episodes in the You 2.0 series? Make sure to give them a listen here or on our website:
- You 2.0: The Gift of Other People
- You 2.0: Taking Control of Your Time
- You 2.0: How To Say No
- You 2.0: Remember More, Forget Less
And if you like today's conversation with Jamil Zaki, be sure to check out our earlier conversation with him, "The Empathy Gym."
You 2.0: Remember More, Forget Less
It happens to the best of us — we blank on someone's name, or forget an important meeting, or bomb a test we thought we'd ace. In this week's installment of our You 2.0 series, we talk to cognitive scientist Daniel Willingham about the mysteries of memory: how it works, why it fails us, and how to build memories that stick.
For more of our You 2.0 series, listen to our episode on how to say no.
You 2.0: How To Say No
Saying no to someone who asks for something is often easier said than done. Maybe it's a boss who wants you to take on a new assignment. Or your kid's teacher, seeking volunteers for a field trip. Or a friend who asks you to lend her money. How should we respond to these demands on our time, energy, and resources? This week, psychologist Vanessa Patrick explores why it's so hard to say no, and how we can set boundaries that will make it easier to do so.
If you haven't yet caught the first two episodes in this year's You 2.0 series, you can find them in this podcast feed, or on our website:
You 2.0: The Gift of Other People
You 2.0: Taking Control of Your Time
Thanks for listening!
You 2.0: Taking Control of Your Time
Many of us feel like there aren't enough hours in the day. We struggle to make time for all the competing demands at work and at home, and inevitably feel like we're letting someone down. But what if there were a way to reclaim our time and, as a result, get more joy out of our lives? In the second episode of this year's You 2.0 series, psychologist Cassie Mogilner Holmes explains how we've fallen victim to the illusion of time scarcity, and what we can do to spend our time more wisely.
If you enjoy today's episode, check out last week's kick-off to our series, "You 2.0: The Gift of Other People."
You 2.0: The Gift of Other People
Are you someone who strikes up a conversation with the person next to you on the train? Or do you keep your eyes fixed on your phone? Do you offer gratitude to friends and family? Or do you assume that they already know how you feel? This week, in the kickoff to our annual You 2.0 series, we talk with psychologist Nicholas Epley about our interactions with other people, and how we can make them more rewarding.
If you enjoy today's episode, check out these classic Hidden Brain episodes:
You're Not the Boss of Me!
Whether in your personal life or at work, you've probably experienced what it’s like to have people reject your requests. To be told that what you want is unfair, or heavy-handed. And you've likely been in the opposite position as well — pushing back against requests that step on your freedom. This week, we talk to psychologist Benjamin Rosenberg about how we respond to infringements on our sense of autonomy, and how we can avoid sparking this resistance in our interactions with other people.
If you know someone who would like today's episode, please share it with them! And if you enjoy our show, please consider trying a free seven-day trial of our podcast subscription, Hidden Brain+. If you use an iPhone, you can sign up at apple.co/hiddenbrain. If you use an Android device, you can find Hidden Brain+ at support.hiddenbrain.org. Thanks for listening!
The Cure for Self-Importance
When we meet new people, we’re often drawn to those with a commanding presence or a dazzling personality. But it turns out that a very different trait — humility — is important in the long term. This week, in the first of a two-part discussion, we talk with psychologist Daryl Van Tongeren about different kinds of humility, and how this overlooked quality can play a powerful role in workplace dynamics and romantic relationships.
If you like today's episode, be sure to check out part two of our conversation, exclusively for Hidden Brain+ listeners. We talk with Daryl Van Tongeren about existential humility — being open to the idea we might be wrong about life's biggest unknowns. It's the episode called "Asking the Big Questions." To listen to Hidden Brain+ with a free seven-day trial, go to apple.co/hiddenbrain or support.hiddenbrain.org.
Where Truth Lies
When we think about misinformation, we often focus on blatant errors or deliberate attempts to deceive us. But in recent years, social scientists have found that misinformation comes in many flavors — many of which are far more subtle than obvious falsehoods. These forms of misinformation prey on our mental blindspots, and take advantage of our passions and loyalties. This week, economist Alex Edmans explores the many insidious forms of misinformation, and how we can all get better at separating fact from fiction.
For more of our work, please consider joining our podcast subscription. Hidden Brain+ is where you’ll find exclusive interviews and deeper dives into the ideas we explore on the show. You can try Hidden Brain+ with a free seven-day trial at apple.co/hiddenbrain. Or if you’re an Android user, sign up at support.hiddenbrain.org.
How To Be Alone
We're always told to reach for that next ring, work that third job, go to that boisterous party after a long day at work. You only live once ... right? But psychologist Netta Weinstein says that when we constantly engage in achievement and distraction, we lose something essential about ourselves. This week, she makes a case for solitude, and examines what happens when we seek a quieter, more reflective interior life.
If you like today's episode, check out our two-part series on mindfulness:
Changing Our Mental Maps
As we move through the world, It's easy to imagine we're processing everything that happens around us and then deciding how to respond. But psychologist and neuroscientist Norman Farb says our brains actually navigate the world by coming up with mental maps. These maps act like an autopilot system, allowing us to navigate our lives more efficiently. But sometimes, they can lead us astray, leaving us stuck on a path of negativity and unhappiness. This week, we talk with Norman Farb about how we can update our internal maps and see the world more clearly.
If you like this episode, be sure to check out part two of our chat with Norman Farb for Hidden Brain+. That episode is called "Making Sense." You can try Hidden Brain+ for free with a seven-day trial by going to support.hiddenbrain.org or apple.co/hiddenbrain.
Related Episodes
Episode 116: Why being mindful matters
Is it a good idea to be always busy or in a rush?
To run from task to task without taking time to enjoy the moment? Maybe not so much and certainly not 24/7.
This episode is an introduction to what it means to be mindful in all we do and how being stressed versus calm affects all the layers of our existence, relationships included.
Find out why cardiologists are worried about the pace of some of their patients and which steps can we do right away to shift our mindset from stressed to calm.
Discover how excessive, unmanaged stress deteriorates your life quality and why you feel you can't say no and keep running faster all the time.
Hint: there is more to mindfulness than sitting in a quiet room with candles!
Episode 32 - Trump Tax Cuts and PolitiFact
FOMO: Das Gefühl, ständig etwas zu verpassen
E127- Adieu FOMO! (Pour en finir avec la peur de rater quelque chose!)
La fameuse fear of missing out ou la peur de passer à côté d’une information importante ou de louper un repas entre amis, ça te parle? Avoue que si cette peur te concerne, c’est énergivore pas à peu près parce qu’il y a toujours des évènements auxquels assister, des invitations à ne pas manquer ou encre des nouvelles tendances qu’on ne voudrait surtout pas rater de peur de ne pas être in! Simplement qu’à te faire cette énumération, j’en suis essoufflée!
Cette crainte fait pourtant partie de la vie de plusieurs adultes qui vivent avec le TDAH.
L’hyperactivité peut nous tenailler et on a envie de tout faire ou encore, notre estime de soi n’est pas nécessairement à son meilleur et le fait de rater une tendance mode ou de ne pas aller au souper d’anniversaire de notre amie peut venir jouer sur notre moral.
Heureusement, il existe quelques trucs et astuces pour donner un coup de pied au popotin de la FOMO. Je te les partage dans cet épisode. Tu pourras les tester immédiatement après
l’écoute de cet épisode si tu as envie de te débarrasser de la FOMO une bonne fois pour toutes!
Si après l’écoute de cet épisode, tu as envie de venir en discuter avec moi, je t’invite
à venir me rejoindre dans le groupe Fb Focus Squad, un groupe axé sur le TDA/H adulte. J’y partage mes trucs et astuces, ceux que j’utilise autant dans mes enseignements en tant que prof de yoga et de méditation que dans ma vie personnelle. C’est aussi un lieu d’échange entre belles personnes dynamiques et créatives, parfois un peu étourdies! Si tu as envie de te joindre à nous, c’est ici!
Bonne écoute!
Pour découvrir tes valeurs profondes, clique ici!
Et pour me retrouver :
Pour me retrouver sur ma chaîne YouTube et me voir la binette, c’est ici!
Site web et infolettre : http://melissaleclerc.com/
Fb:https://www.facebook.com/meli.tdah.adulte
Instagram: https://www.instagram.com/melissalecerc/
Situ veux te procurer le journal Daily Focus, c’est ici!
P.s. : Si tu as aimé cet épisode, n’hésite pas à laisser un 5 étoiles et un commentaire sur
Apple Podcast pour soutenir gratuitement le podcast. Je te remercie déjà d’avance!
FOMO?.. JOMO (Joy of Missing Out.)
FOMO?... Yep, we've all been there. Your fear of missing out is controlling your true feelings and decisions, and you may not even realize it. In this episode your host, Jadyn Hailey shares different forms of FOMO you may experience and how to turn your FOMO into JOMO (Joy of Missing Out.) Tune into this episode with an coconut milk matcha latte, as you begin to live life through the lens of JOMO.
Current Obsessions:
- tofu!! such a tofu girl
- taking time away from the phone
- For my gals with businesses!! love shopify
Become your own dream girl with me!! :
- Instagram: Jadyn's Instagram & Busy, Yet Pretty Instagram
- Productive Day In My Life: WATCH
- Tiktok: @Fairyjadyn
- My Amazon Storefront: Jadyn's Storefront
- Outfit Details: My Closet