The Talk Market: How Stories and Psychology Shape Our Economic Lives

By Shankar Vedantam,

Published November 4, 2019 at 5:18 PM CST

Many people think of the economy as following a set of fairly scientific principles.

We buy more if things are cheap. We buy less if they're expensive. Companies hire more people if it looks like the economy is growing. They cut back if it looks like things are going to tank. Or say you're in charge of the Federal Reserve. Economic indicators help decide whether to raise or lower interest rates.

All of this seems very rational, very mathematical.

But Nobel Prize winner and economist Robert Shiller suggests that this kind of thinking might be too narrow.

This week on Hidden Brain, we talk with Shiller about the role stories play in our economic lives — not just the purchases we make as individuals, but the fate of entire economic systems.

Additional Resources

Narrative Economics: How Stories Go Viral and Drive Major Economic Events by Robert J. Shiller

Tulipmania by Anne Goldgar

The Truth About Tulip Mania, by Lizzy McNeill and Sachin Croker, BBC, 2018

Laffer Curve Napkin at the National Museum of American History

Shankar Vedantam

Shankar Vedantam is the host and creator of Hidden Brain. The Hidden Brain podcast receives more than three million downloads per week. The Hidden Brain radio show is distributed by NPR and featured on nearly 400 public radio stations around the United States.

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Thomas Lu

Thomas Lu is an assistant producer for Hidden Brain.He came to NPR in 2017 as an intern for the TED Radio Hour. He has worked with How I Built This, All Things Considered, Weekend Edition and Pop Culture Happy Hour. Before coming to NPR, he was a production intern for StoryCorps.

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Tara Boyle

Tara Boyle is the supervising producer of NPR's Hidden Brain. In this role, Boyle oversees the production of both the Hidden Brain radio show and podcast, providing editorial guidance and support to host Shankar Vedantam and the shows' producers. Boyle also coordinates Shankar's Hidden Brain segments on Morning Edition and other NPR shows, and oversees collaborations with partners both internal and external to NPR. Previously, Boyle spent a decade at WAMU, the NPR station in Washington, D.C. She has reported for The Boston Globe, and began her career in public radio at WBUR in Boston.

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Jennifer Schmidt

Jennifer Schmidt is a senior producer for Hidden Brain. She is responsible for crafting the complex stories that are told on the show. She researches, writes, gathers field tape, and develops story structures. Some highlights of her work on Hidden Brain include episodes about the causes of the #MeToo movement, how diversity drives creativity, and the complex psychology of addiction.

See stories by Jennifer Schmidt