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Remember the great toilet paper, flour and egg shortages that we saw at the beginning of the pandemic?
Those weren't caused by problems in manufacturing: there was plenty of everything to go around. The shortages were caused by the story that we told ourselves, and our neighbors, and which traveled faster than the coronavirus itself.
In his book, Narrative Economics: How Stories Go Viral And Drive Major Economic Events, Nobel Laureate Robert Shiller talks about how narratives--stories that inspire emotion in consumers and influence their actions--should play a bigger role in predicting macroeconomic outcomes.
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