narrative economics

Narrative economics is the study of how stories and collective beliefs influence economic behavior and decision-making. It suggests that the narratives people share—such as tales of financial crises, prosperity, or social change—shape their perceptions and actions, ultimately impacting markets and economies. These narratives can drive consumer confidence, investment choices, and policy decisions. By understanding the power of stories in economics, we gain insight into how emotions, rhetoric, and cultural contexts can affect economic realities, making narrative a crucial element in economic analysis and forecasting.