So that we can continue all hear and make sure the conversation is recorded. Copies of the books are behind the register so you can grab your copy and there will be a line right here for the signing. Afterwards, if you please hold up your shares to the next goal of the bookshelf leaned them up there, we would appreciate that. Now to the main if it. It is my great pleasure to introduce Robert Shiller, hes an american economist academic in the best la author. As of 2018, he served as a professor of economics at Yelp University and he is the fellow of the l school of Management International center for finance. In 2013, together with eugene and hassan, he received the nobel memorial Economic Sciences for their critical analysis. We are today to hear more about his new book, economics. All stories go viral and drive Major Economic events. In todays world, contents going viral has become imperative for everyone. From individuals hoping for their more 15 minutes of fame. Two businesses and meet Media Outlets looking to attract more customers and followers. And all of that, has a bigger effect on the economy than we actually think. And in his roads, they do not understand the economic of popular narratives, you do not fully understand changes in the economy and economic behavior. In the words of john, author of economics intellectual pride bubbles and busts in Financial Markets causes and so much disruption in our lives. Economists have explored all sorts of possible causes from subtle changes in monitor policy to the solar and cycle. In this fascinating book, Robert Shiller argues that what matters is the good story. Economics can explain what state text dismissed and shows how viral shift in economic thinking reasonable real epidemics. And from the university of cambridge, a fascinating and important book, written and engaging style and good examples. That went out further ado, help me welcome Robert James Schiller value [applause] will thank you. Im going to talk today about going viral. However, i think the idea of going viral is the bit older than you might think. And as weve god may be stronger with the internet but going viral and fake news, which company is it are actually old concepts. Maybe i can ask, anyone here a classic scholar . Do you translate fake news into latin. I dont expect anybody to know that. Does anybody know this . You are not old enough. [laughter] the latin world is rumor. It is the same meaning as today. These to be worried about rumors. They can make or break you. So its not new. In my scope of history goes way back. I am interested in Understanding Economic events like what causes the home are a session. Also why some countries seem to be prosperous and others not. That is the wealth of the nations. I am taking what i think is an unusual perspective on it. The thinking that these events happened not because of some exogenous if it, like sunspots. But because of talk. Most of you are not economist right. When i said sunspots, theres a famous article in the late 19th century by William Stanley devens, who was a british economist who said, we finally figured out what drives the world economy. Why do they have these booms and busts that span over the whole world. And he says it has to be something that covers the whole world. Then he thought of the sun. Because the sun goes through periodic storms, generating what are called sunspots and solar output is lower. He said thats it, theres not much sunshine in sometimes. In the agriculture fails and the drags everyone down with it. Turns out he was wrong. You cant actually in the data doesnt match up with that. The solar output isnt that variable. So what is it. Start talking right now not a recession. I would cover the whole world. Why would that happen. Are all these countries and thousands of miles apart, so i think there might be some good economic reasons for it. But i am that a lot of it is due to talk. And something going viral. Even in olden times, people talked. They always talk. It is a human nature. Anthropologists who study human universals, and one absolute universal that is in every human society, is that they talk. Secondly, we love to gossip. They love Human Interest stories. What they dont do is drive diagrams like economists do. Generally they dont. So it must be that. And i am thinking that the changes in the world his economy, take place because of new and different stories. So i coined the term narrative economics for my president ial address before the American Economic association in 2017. I called it narrative economics. I presented this to an audience of 900 economists. I was faintly critical of the profession right to the profession that their annual meeting. I said why is it that we dont study the stories that people are telling. Stories that go viral. Its just not in our tool bag. They dont generally rude people but i was afraid of it. Nobody booed and they applauded at the end of my talk so that in holding me to write a book about it. So the term narrative economic actually does go back over 100 years. It used to mean economic history. He would tell stories, chronologies about maybe a financial crisis. In this first this banquet on than that banquet on and then follow the Parliament Went to decided to do this or that this just a sequence of events. Thats not what, i mean. Narrative economics is the study of popular narratives. We got to troy to get into people his thinking. People dont tell you what their economic model is. If you ever had a dinner conversation where you discuss economic models, is probably not. We need to be realistic about what forces changed people his thinking. Economists have a habit of assuming that people are rational. And they write down with the economists think it would be rude rational and also consistent through time. And not subject to any fads or crazes or new ideas. I think we have to move past that. Narrative economics is about people his stories. Another reason why economists dont like to talk about it, is this kind of embarrassing. Some of the stories dont sound very intellectual. There are real people, some of them are intellectual but some of them are. We have to look at the stories that are contagious. That means to go viral. We do save go viral, thats a disease analogy. I have been getting stacked in washington this week about this book but their long talks. I have to get it back a little bit. Scholarly talks, the key idea that i think is essential to this book is to think about epidemiology. I also like to think about brother things. Academic disciplines are to department lives live are the littlest and we are often in graduate school, where i teach a young, already graduate school, if you are preparing your students, it is your most Important Mission is to prepare them to play the game as an economist. Satan focusing on research and if you are teaching a person economic history which is becoming rare these days, and if you are, you probably juice it up with a lot of econ metrics that will help them on their dissertation his. You just the site and enough time to read psychology or sociology or weve god forbid epidemiology, what is that. When a tea set. I am looking at the basic epidemic model and medical schools that medical students learn. There is a mathematical epidemiology. This literature is about a hundred years old. Since developed quite a bit. Ill see the key idea imo for simple simple fighting but it is that any disease as a contagion rate. And it is the rate of growth of the infected population. But there is also a recovery rate. Our removal rate. People get over the disease when they die but lets just be positive and they get over the disease. Then there are immune from it. So in order for an epidemic to get started, it has to have a contagion rate above the recovery rate. Epidemics are mysterious in medicine. Youll see an epidemic that just suddenly seems to come out of nowhere. Why is there an epidemic in this town and not in the neighboring town. Will the epidemiologist would research that and might see, there is Something Different about this town in the contagion rate has gone up. Maybe they have changed some of the behaviors or they are together more. Or Something Like that so they will be more contagion and faster, pick up above the recovery rate in the oc and explosion of the disease that town. Another mysterious lee it will go down. Usually dont know exactly what people are doing that is different. The maid or contagious. But that is the lesson i am trying to explore. Now looking at diseases but looking at narratives. The idea is that some narratives are very contagious and some are not. A kind of literary reasons. In this bookstore, it looks by monday talented writers. It is hard for us to know how they do it. Some books are bestsellers on how would you know and how can you predict it. There people tried to computerize that and identify bestsellers. His book outreach, called the bestseller quote. That predicts and you can give it a text of a book and it will give you a prediction that will become a bestseller. But i dont the field is very far advanced. There are some Human Element that is going to be a long time before computers can capture that. Theres something in the Creative Genius of some people. I give one example from my book. Its all example but i like it because it precedes the computers. It precedes the social media. This is the example of the curve. I get recognition so that means contagion. Did you learn in a graduate program in economics. Okay, how did you learn it. Im sorry to do this. [laughter] landmark distinguished audience. He said he was on the congress. Are in the computer model. In the reagan stacked cut. [laughter] [inaudible conversation] he heard it in the news. Some of you younger people, might not know. I would tell you the story. Art had dinner in 1974 with donald rumsfeld, the secretary of defense, and cheney it was later to the Vice President of the United States. Art is an economist, also a wall street journal writer. In laughter pulled out a napkin, and did a diagram illustrating why it is that we might expect to see that taxes and stacked revenue will actually go up. End of story. When the world does that go viral. Okay. It is partly because it would help to justify stacked cuts. I think it takes more than that. Its an original idea that cutting taxes might raise revenue. I can quote art laffer, who says no, it wasnt the original idea. In fact he said because all of the way back to the economists in calhoun, who wrote in his economics letter in the 14th century that it can happen. Getting stacked rights can sometimes raise revenue. I think its absolutely right. It can happen. Who is it for 800 years. [laughter] on 800, i am subtracting a lot for quite a long time. Why does the story go viral. I think the viral nature of the story has something to do with digital imagery. The napkin somehow fits in. I was reading, cicero, the roman senator. He wrote this about 2000 years ago. He says it. Through speeches with visual visual member tree because people remember it better. There is your visual imagery. Then he had a sorry quality. That doesnt exist. But he used to be a nice restaurant in washington dc. Somehow he figured out that that was a good story. That is his individual genius that he told it well. In his book. It came at the same time as rubik his cube. Do remember that . That is not an economic imperative, it was a narrative. Rubik his cube went viral. And about the same amount. Depends on the source. Art in the rubik his cube. Art was a live changer and then he came out with a book and recording, he was a celebrity from that one narrative. In this and the like are the story. The National Museum of american history, right here in washington, it was developing a special exhibit business history. In somebody there thought i wonder if we can keep that napkin. Does anyone still have it. And so jim had passed away this was monday years later that his wife was alive and he said can you look at him among his things and we are looking for a napkin with a drawing on it. So she then went through his things and she found lo and behold, there was a cloth napkin the diagram drone on it. She quote the museum back and said i have it. You can see it if you go to, i was going to go to the museum today but i didnt have time. But i wanted to see if it is visible and it on website and they are very proud of it. Theres only one problem. A reporter called art laffer, and asked bump up it. And i said, i dont believe it. We do mean you dont believe it. You did it. My mother taught me never to write on nice things like a cloth napkin at a fancy restaurant. You would do that either right. [laughter] would you write in a cloth napkin, it just seems like no good person would do that. [laughter] but a strong narrative doesnt have to be true. [laughter] is apparently. Either way if if you want to watch it, somebody got art laffer, cheney and Donald Brumfield together to read and backed very dinner. You can see it that went out, even though he passed away. But i think that this had economic impact. It helped direct Ronald Reagan and before that i think it probably helped elect and she was elected, Margaret Thatcher in the uk was appointed. Hattie said this, it didnt and it didnt penetrate englishlanguage countries. This narrative. I looked it up in france and i looked for a dont know how to see it but did get attention in france, i dont speak french speaking french the first socialist president of france, so narratives had a patriotic element. And an element of identity the may define your live with some story and as a patriotic american, you tend to repeat stories about americans or at least brother close countries like australia. I think that is where things go. I have so much more. Let me just talk about two things. One is home prices. In the brother is the Great Depression. Just coming out from the Great Recession which was named after the Great Depression. It is very much on our minds. Which one should i do first. Only start with home prices. We threw a huge view move and home prices in the United States and also the uk and brother englishspeaking countries particularly in the early 2000 his. And both started to falter around 2005 and reach a peak in 2006. Then it faded away. And were looking at the aftermath of that. So what caused that. One thing i could do now is digitize stacked and i can search for phrases and see how common they were. A been interested in the snow for a long time Summer Research goes back monday years on this. And i look for the term housing bubble. Almost nobody says housing bubble in 2003 or 2002. And then suddenly is doomed. I can already get google searches in the google trends weight it can do the searches and starts in 2004. See the sea spike up in 2005 and 2006. All of a sudden they went surfing for the term housing bubble. Another thing that i found in doing various digital searches is the term flipping houses. And suddenly it came up at that time. It is typically used like you are playing playing into this housing bubble. Flipping houses means buying a house and la it just a few months later as a huge profit but that things that were going around that time that flipping houses was highly profitable and there was just excitement, may be very member this. Only a few years ago. I used to listen to a cabdriver and i troy to draw them out. Cabdrivers always come around to home prices before long. I was in a restaurant with my wife and i hear the word home prices. And i usually did. It seemed like everyone is talking about it and then i became embarrassed. Because he thought they mayday big mistake and it was just foolishly caught up in a bubble. So i can find there was a sort of, lots of books written about how to flip houses. In the aftermath, i think donald trump talks about it a little bit. He wrote monday motivational books are present. Among them, motivational books about how to make a lot of her name in real estate. Thats what he does right. So help promote his career as well. This whole if it did. And the i wanted to talk about briefly is the Great Depression. There was a stock market crash in 1929 and after that, there was an economic depression until world war ii. So decade. That decadelong thing, is the legend today. The legend of the Great Depression came back, i can tell you that i did searches they came back violently, in 2008. We have named it the Great Recession because everyone was thinking is this the Great Depression again. There was a national act because people still remembered the narrative. It faded a lot but it was in the back in irvine. Its like an infectious disease. Is an epidemic and stop bothering very monday peoples were not really into it about it but then something will change it becomes contagious. Maybe as a mutation in the disease. Or maybe a new peroration of the narrative and it comes back. But what else, what else i have a story of the Great Depression. I wonder if i can elicit from one of you. Franken roosevelt mayday famous in his inaugural address in 1933, he explained what we have to worry about. [inaudible conversation] i heard that from someone else to. That is so famous that we the only thing we have to fear is fear itself. That they Great Depression is the constant thing where we see brother people and we think they are psychologically depressed. So i pulled back to. It is a contingent theory. By the way, i. Out in the Book Franklin roosevelt wasnt original there may be calhoun sent to. I dont know but it was mayors assistant in boston said exactly that. Who is he anyway. This wasnt a good story. When roosevelt said it, suddenly it was good story. Yell professor irving fisher, senator around the beginning of the depression. When before 1933. Summerlike stories about celebrities. We like stories that have a certain graviton. The inauguration, by the way if you want to watch the 1933 inauguration in your president roosevelt said that in his own words, just search for it on youtube. It was all filmed beautifully done, he is more of a great voice and her current president but he was a good speaker. Another thing, ill just leave you with one thought is it is important that you dont here, there were brother causes of the Great Depression. I think one of them which was talked about a lot in the Great Depression we dont associate it was that robots are coming to replace jobs. And people are going to be permanently unemployed with these robots. They may see, wait a minute when they talking about robots or it when they talking about this in 1930. You bet they were. That was the term robot came from a play by Charlie Chaplin. In a nice movie about that called modern times. You should watch, its a great movie. Its about Charlie Chaplin was working in a factory. It was automated and had conveyor belts. He had to work, he had to do the same task and is really funny. It drove him crazy. I am thinking is that story that was happening in the Great Depression and it was repeated monday times in the Great Depression. They see this is the power edge. We have machines now with so much horsepower they outnumber a few months by the thousand to one. Like a thousand horses for every human. So how can people stay employed. That was on the rise. And the brother story in my book about the dial telephone. He used to be and you probably wouldnt know how to operate a telephone back then, and all telephone in the 30s, in pick it up and it was a direct connection to the operator. And she, usually machine those days, to condensate number please. And you would repeat the number and then she was at the switchboard and connect you. But the came out with the dial telephone. Those were called robots because they were doing the job of this operator is now being thrown out of employment. This told dial telephones in the u. S. Senate in the early 1930s. One senator got so angry and upset, im not going to do the work for the Telephone Company had them thrown out. So thats why i see. There is a difference between, they were wrong about the power edge because after the depression, we came right back to full employment. It was like he was a major technological change that was going to create an omnia of an opponent forever. But is the fear of that that caused it. The caused and contributed to the severity of the depression. So in my mind, i think we are at risk at this again. Were going through a resurgence of technological and employment as a cult than a narrative. We have different name for it. We thought Artificial Intelligence and we think weve never been through this before and i am not staying that it wont be. Maybe this time it will be a disaster, not going to troy to answered that question but it hasnt in the past. But a scare people in the past so i think we are in a somewhat dangerous situation dangerous but if in employment increases, we will see a rise in fears. May be a more than usual his recession. The next recession. So i will stop at that. We can open it up for questions. [applause] good evening, my first question is about a racial trend. Robert again. You see thank you and you start to talk about that in terms of patriotism in the u. S. Versus france and why these ideas became viral. So in terms of the Global Economy and ai, how do you think different ideas are going to have epidemiological models. And what identity you have. One i shouldve mentioned that book. Robert here in washington, he is the great friend of mine. Georgetown washington university. Weve written two books together. This book is also partly his inspiration he wrote a book with Rachel Clement called identity economics. I think it is really nice. It emphasizes that one has a sense of importance. We all have a sense of our own importance even slaves had a sense of their own importance. By the way i just saw the Harriet Tubman movie that is coming out. I recommend it. It is about what it was like to be a slave in the american south. And how some of them were spirited and troy to get away from it. But everyone has a hero story of some sort of another behind themselves. We love story. But it explains economics and the events. Such as the prejudice against women among men and the difficulties theyve had at various times in getting accepted in the workplace. Because why do men resist it. It is because it challenges their story about their own uniqueness. And so that it is a great story. Maybe you have juan pierre. I am just asking about the viral stories. Robert i have an example in my book of the story of George Washington and the cherry tree. Anyone heard the story. [laughter] you havent. I have one person shaking his head no. Well i will tell you the story. George washington was 12 years old and i actually read the earliest version of it. So i have it correct. Get a birthday present. Sorry didnt see birthday present. The never did that. You present. Of a small hatchet. And so like any normal boy who went around, looking for things to chop. In a damaged a prized cherry tree and kill it. Or essentially killed it. And then his father was furious and he is to george and says, did you damage or did you kill the cherry tree. And george answered, i cannot tell a live. I did it. Why is that such a great story. I think it goes back to 18 oh two and a book about my parson. Do you that here. [laughter] it tells that story it is almost a firsthand account she grew up with George Washington. I suspected it is a true story why is it a contagion story. I dont know, tell me what is is contagious but parson was another good writer and is filled with stories about George Washington. That was his most successful. I think we have to become more humanitarian and or economics departments. To understand why people fall victim to certain stories. You should move on to the next question. I have two questions. The first one, have you studied economics over time and was at the time of the greek, within the 90s, how did they propagate. Robert i am studying narratives. I found another wonderful essay by mission of some osaka in the second century. He was a cynic. Thats also an ancient word. The cynics for the skeptics of the time. Write a solution as an estate, cawley professor of public speaking. In which he describes his advice to young wouldbe speakers. I will make embarrassments of people today but it sounds so familiar. But he was making a joke of it. I think it was reality that people who are public speakers would troy to engage, and lets look at that audience and get their engage engage them with their identity. And not worry is it too much about the facts. He sent a wave of facts. The senate, a professor would tell you, dont worry about the facts much. You tell a good story. I recommend if you have that will cure two. [laughter] as an economist, is become so mathematical and full of competing models. Do you foresee incorporating this in models or should be legal behind. Robert actually this book contains mathematics. A put it in the appendix because it does scare people off. You can read it if you want to. But the standard model of economic fluctuations, can briefly be academic here. It has and is based on the idea of the multiplier. Multiple modes of expenditure. It was a way they are, recession is to raise government expenditures of taxation and the deficit spending that will create incomes when the and inspire people to do things with the her name. That creates income for them. That is the second round. And that will create incomes yet for more people and they will spend. So it is a feedback rule they start by stimulating with deficits spinning fiscal policy. That is all fine but its only part of the story. So i want to broaden the model input in some of these models that come from medical dummy colleges. To further enrich, the dynamics i think there is an assumption that it doesnt matter what the president says, it is just the weight her name flows the matters. It matters a lot. Or the chairman of the Federal Reserve. These people have enormous influence in the stories they tell for his indicate huge difference. Is the wonderful book thank you. You see that the economy doesnt talk about narratives. I am also in an economist. We talk about narratives all the time. They just call them information. And beliefs. Agreement values in social economics and values. You bring a book, lease for example are the people like looks like value. [inaudible conversation] what is its value to the matter of perspectives over very different projects in very different ecological things. Robert okay this is the grand question. Game theory is an importance theory. Economists also talk about yet non uniqueness. The talk about if people believe one thing, one equal with librium. For example, the idea that the diamond model of Bank Failures says that making systems is the staple equilibrium but can be changed suddenly by changes in expectations. So we can build on that. Im not staying or trying to replace all economics. I am thinking that we have to go to the next step and make it more realistic. So why do we have banking panics. What are the narratives. In my book, i talked for example this is the diamond debate sort of thing but its embellishing the model. I search for financial panic. Going back to 17 hundreds, panic of some years was a term. The panic of 1893. I dont see anything before 1750. You dont see anything about stock market crash. Will there was a big mississippi bubble in the 1720s so they had the word bubble. But it was stating, it wasnt prominent. Until the mid 19th century. We had the panic of 1837 back then, they didnt use the word panic to describe it. There is the panic of 1857 and then of 1873 and then 1893, then of 19 oh seven. In this only founded the Federal Reserve. Which for all times, stop financial panics and people believed that for a while. So i felt that, all of these were part of a constellation of narratives. Libby talked about the panic of 1837 in 1837. But they started talking about it in 185720 years later and they talked about it even more in 1873. Thats another decade later. So they were all going together. Nothing about it, what is the bank run. If a crime happens but when people Start Talking about a bank as potentially insolvent. So you meet someone on the street and he says, did you hear about the eagle bank. I mentioned the bank, its entire endowment at the eagle bank. In the 19th century. Or did you hear of northern rock. Ed is going to go on. Just go look at it, go over there. Theres a big crowd out in front of the mate trying to get in to get their her name out. Same panic and you troy to pull all of your her name out. Thank, they cant withstand that. They only have so much reserve on hand to pay out right now. They have to call the loans in. Its a slow process. So the whole thing collapses. But that can happen only if there is a narrative. That awakens them to the possibility. It has to do fast enough that its actually contagious. Some thinking that we have to ask why did people even get into that mindframe and why we forgot about things. We didnt completely forget about them. Theyre like a background epidemic disease very low loophole. We thought we had taken care of it until 2007, and it all came back. Those alternatives suddenly became contagious again. I am thinking that diamond, who seems to be in others like them are doing something very important with economic theories. I want add to it to some sins about where these beliefs and ideas and their dynamics. What brother dynamics. Images something in the beginning about persistent narratives. Like if people are asking about the truth, they prefer the original story in the head. I was kind of curious if in your research there was anything that came up about how we are wired to perhaps not really see the objective truth but wired more for the truth that will sustain us and ptuving in. Robert one thing that is revolutionizing is neuroscience. It is wired in our brains and i believe we are wired for narratives i associate in the book songs we are wired for songs as well and why we have that. As a human universal anthropologist would see, every society has music and every society has stories and fables. There was a famous experiment in the 1950s in which a researcher could elect toys in the human brain of an awake person. That might be considered unethical that kind of research. Let me just tell you of the result. So they had a person awake with local anesthetic. They had a hole in the head. They were pushing an electrode around. They would give them a jolt of electricity. They found that in certain spots of the brain, the person what is suddenly when suddenly react. You asked them, what you are reacting to. And she would see, i hear music. Some of the radio on. They discovered that she would hear a song that she knew well when they start the electrode and that whole thing would start at the beginning. If they interrupt electricity and do it again, it starts over again from the beginning so it has a sequence brother parts of the brain we fire the electrode, she can says oh, i am thinking of a story they would ask what the story is. Oh my mother is telling me this, its a long story. But you have stories in your brain singer organized that way. So they are naturally contagious. Even music and language are intertwined. Log in a lot of songs have stories to them. And when they read the, he didnt read it, he recited the odyssey, he sang it apparently. So music has stories are intertwined basic to the human brain. People intuitively think about economics but they connected with stories. So you want to expand the story anyone to do Something Like what art did, and he said one of the great regrets in live has brought to call it, call it the oneness key curve. [laughter]. In any if it, and is probably just as well is called the leofric curve. Robert were making it. I guessed, i am a physician. Soy learned epidemiology. It doesnt quite work that way. Usually it is something causes a, some physical thing. Causes an illness and the very first epidemiological study was of polarizing. It was from a well. Robert i know that story. I have voice wondered about economics to troy to make a scientific thing which involves a human component that is not as easy to identify as a virus or a bacteria so for example, in places of always been based on expectations and the whole idea in 1979 was to take the back of inflation that would get the idea out of people his minds so the more expensive device of the next year his are going to it this year. Expectation and economics can be based on just mass or physical findings. Like medicine. Theres a human component that is very hard to integrate. A lot of economics will see but based on rational theories in the turns out the people dont think like the rational man. People are irrational. And it is hard to make it in formula that. Robert i see is that half truth. People are often rational. Our Society Works well because there are irrational thinkers around us but we are also often irrational. Thats why i want to be more inclusive of different approaches. We can talk about policy, we cant use a in a row amount model. We have to think broadly. Okay thank you. Robert okay. A prominent narrative, i guess its been around now for a number of years is that the Federal Reserve controls Interest Rates. All Interest Rates. To what extent do the actual control Interest Rates and to what extent is it because of a rumor and that sort of thing of the idea. Robert actually on a paper in 1978 called candy the fence, control real Interest Rates and my answered was well maybe in some sense partly. Shortterm. Robert fully target the federal funds rate which is an overnight rate. Mary shortterm. In the if it the longer rate drift. Bring a puzzle right now than around the world, long rates are very low. They continued treasury for one and a off percent. That means in real terms, we have zero interest rate. You wrote it even worse. They have 30 year bond rates there like at minus half of a percent. Thats supposed to go below ze zero. Why would you loan her name and asked them to pay back last met. There is something, oddly behavioral going on right now. Is some sort of investor inertia or cost of doing business a different way. To make this happen. It is also this is something i am working on. The book is the beginning of a research project. Not just for me i am thinking it will be everybody and a lot of people not everybody in econ and they are starting to be noticing the data that we have our peoples narratives and they are starting to Pay Attention to it but i dont have it all worked out. Not yet. Why Interest Rates are so long, solo, theres a lot of theories about it. Its an interesting thing to see. But in thinking narratives probably play a role in that. Okay thank you. Robert thank you robert, i just want to see we have time for two more questions. Thank you very much. Hi and thank you so much for coming. I have a question, automated sent press what it feels kind of obvious to me. [laughter] and so, i want to learn more about how things wordofmouth, in fact are incorporated into economic models and computer modeling today. Robert are unique on major. Journalism. Actually my undergrad thesis was on a textual analysis of like the media versus oil prices. Im just thinking of so monday things from like my world where of course she would build wordofmouth effects into an economic model. Robert i missed the first thing in my prepared talk, namely that of all of the social Sciences Economics and finance are the worst and incorporating narratives. This is part of the figure one in the book. Really to listen to these brother people like you, it is really not talked about and there are some in its increasing our attention to narratives is increasing in all of the social sciences in the document it seems obvious to me, since i was an undergrad at the university at michigan, talk about that in the preface. I did is requesting talking about narratives that will when i hear about this in my own department. Spirit how does this get incorporated today. Even though it should be, you see has brought. The computational modeling. Robert the Federal Reserve or government regulations, things like that and if you like that is their job is done. Theyre not going to get out in front of an audience generally, but they do sometimes. Not going to get up and see you know i heard from the taxi driver such and such a theory. People are staying this and they dont do research on it. They do have the confidence indexing. He came in it late 1930s. Lets create a measure of confidence. But those guys have always been secondtier people in econ department. We dont really believe. The university of michigan does the consumer index. The Conference Board does a consumer conference. But it is academic researchers, they are not into that. Just like the sound of it. They do a little bit is there. My we have physics and be in economics. [laughter] a lot of people start out, i myself wanted to be a physicist or mathematician. When i was in high school. We are not, one of the most famous economists around 19 hundreds, economics has brought an exact science. Because its about the higher order decisions that people make. The actual making the real world. It involves intention in their secrets and manipulations and it just cant be exact. I want to make it more of a science who by and i thinking that we are going to see it coming decades, a revolution in economics, like the revolution of the 1930s. That came along with new data on gp unemployment rates and the like. Those data sets now are collected by the government for over 70 years. But now he got Something Different. Now the economics and the young people in economics are not so focused on gdp anymore. They get data from Companies Rather than the government. The government doesnt collect data or narrative data, it doesnt sound right. But it is out there and its corrected by private sources. Thank you. So i work in biotechnology. Infectious diseases so i spend my entire live trying to develop an interrupt into epidemics. In school i studied biology but that went out the need to do something to disciplinary such an economic class. Take as monday as i could. I was always annoyed my professors because i was more focused on Practical Application that theory. Fourth for college. Im a nerd. Robert britney. Hes there is any. Anyway. So i have a question. Robert he was a big general so i liked him. Okay so i would love your practical recommendation on how to delay or avoid this impending recession that we all speak of. Hackley is narratives as a tool to actually achieve that. Robert i dont have the most concrete advice i pitch this book is the beginning of 30 years of research by brother economists. Okay. [laughter] his i can tell you that we were saved by the depression by partly by denver who was chairman of the Federal Reserve board and 2007 and 2008 with a crisis came. He wrote a book about the Great Depression who had realworld knowledge and who had the idea that we cant let this narrative get going. I talked to bump up this and he doesnt want to put it in these terms exactly. But that is hard why did they immediately bail out. They did bail out one of the depositors. It helped protect them. He was definitely motivated by fear and fear itself. In the confidence narrative. But its not the core curriculum and economics department. Four yearolds at yell, and our phd program, we have comprehensive exams. With all these mathematical novels i have them doing. I dont think they were wrong. They all have some value. It would just head to move beyond them that is describing what is changing and also often whats changing in peoples minds was at the end of our time. Thank you. [applause]. Is a boston book festival you also be able to watch a keynote talk. It all starts now on book to be dash macbook tv. I am here
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