Economic Narratives Spread Like Diseases

The spread of economic narratives follows a similar pattern to the spread of diseases: there is a rapid rise in the number of the “infected” people spreading the story, but over time, the curve flattens and begins to diminish as people forget and lose interest in talking about the narrative. Spread follows a familiar hump-shaped pattern of rising then falling over months, years, or even decades.

Nevertheless, it may rise again in the future. A narrative is nearly impossible to eradicate. Details may mutate, but often the underlying fundamentals persist. For instance, narratives surrounding bitcoin hearken back to economic narratives about bimetallism in the nineteenth century. Similarly, contemporary narratives about machine learning and automation share much with Luddite narratives as well as narratives about “cybernation” in the 1960s.

Economic narratives are difficult to trace and predict. The economy is complex, and so are the many conflicting narratives and ideas that are relevant to economic decision-making. Like a contagion, an economic narrative may recur in different places and times. The spread of a narrative has little to do with its quality, importance, or accuracy and much more to do with seemingly random details, such as the frequency with which it is encountered. Much like diseases, narratives may be spread more rapidly by super-spreaders including the media as well as algorithm-driven marketing or social media channels.



Shiller, Robert J. Narrative Economics: How Stories Go Viral and Drive Major Economic Events. Princeton: Princeton University Press, 2019.