What is an economic narrative according to Robert Shiller?

American economist, Robert J. Shiller wrote a book titled  Narrative Economics. The main focus of this book is to convince people of the fact that economic facts are driven by our feelings, and that those feelings are in turn driven by what Shiller describes as economic narratives – contagious stories with the potential to change how people make economic decisions.

Robert J. Shiller defined economic narratives as narratives that change people’s economic decisions, their sense of how the world works or what’s important, or what the dangers are that ultimately affects people’s thinking. It studies the stories that people tell that spread at certain times.

“Shiller argues that the power of narratives is both broader and deeper than contemporary economics is prepared to accept. Therefore, we cannot understand or regarding the future, predict episodes like the Great Depression or the 1980s move toward personal tax cuts without understanding the narratives that underpin them,” a reviewer of the book revealed.