What'S Your Story

There seems to be no consensus on whether economics is a science, but it is certain that few people will think that economics is literature, although it also uses stories and narrative techniques to illustrate their views. The scientificity of economics is placed in the economic models, among which there are a large number of mathematical models, which makes people feel like applying mathematics. In "if you're so smart: The Economist's narrative", economist dilderry McCloskey mentioned a point of view. She thinks that the model of economics is a metaphor, while economic historical facts are stories (typical facts). Economists are always worried about whether their models can pass the strict logic test, rather than that the stories they tell will be rigorously tested by facts. Empirical studies, like realistic novels, claim to follow all the rules, but are still fictitious.

McCloskey pointed out that the narrative of economics also involves four types of Rhetoric: fact, logic, metaphor and story. It's very attractive to tell a complete economic story. The story of economics, like fiction, needs an ending and at least three parts: an equilibrium, a transition, and a new equilibrium. The main difference between economists on economic stories lies in their judgment of the outcome. For example, Keynesian economists will think that the story of "oil price rising causes inflation" is full of connotation and has all the advantages of the story; while monetary school economists think that the story is not complete and can not be regarded as a story at all. They think that the rise of oil price must be accompanied by the decline of other commodity prices, otherwise "it is not an equilibrium" ”。 If monetary economists tell a story, Keynesian economists tend to criticize the beginning of the story as untenable and disagree that money is endogenous. Therefore, the economic story has its significance and value. In other words, the demand for the ending of the story is a demand for moral argument.

The economic story can be expressed mathematically as a metaphor (this is the model). So, to put it more bluntly, economists first have a story, and then they wrap it up in mathematical models, and narrative is just the way economists choose to tell stories. There is a clear intention behind all stories, and it is the author who chooses the story. At the advanced economics seminar, "what's your story?" It's a matter of focus. Whether you're using mathematical models or fables, what's your real intention (belief or idea)? It's a soul torture.

There is also a sharp problem for economists. One of the most concentrated areas of economic models and stories is game theory. Ariel Rubinstein, a famous scholar of game theory, is such an "alien". In his academic autobiography "economic fables", he claims that he completely denies any claim that economic models have practical value. What he gets from them is pure spiritual enjoyment, and he does not think that those models can be used to explain economic phenomena or make economic forecasts. Rubinstein believes that the economic model is the story of the interaction between different decision makers. When it comes to Rubinstein's theory of time and space, it is not only the consistency of the theory of necessity and choice in a certain case. The latter belongs to the category of rationality, which is not equal to rationality. This view is, of course, a belief that guides every story that behavioral economists tell.

All people like good stories. Economic fables are short, delicate, interesting and easy to understand. They are often used not only to explain difficult economic concepts, but also to prove theories by economists. Fable is another narrative form of economists. Daniel shipper thinks that fables will have potential impact on public policy in the future, and those untrue fables are especially harmful. He collected a series of typical fables and criticisms about market failure and wrote a thick "famous fable of Economics: the myth of market failure". This book contains famous economic fables, such as the myth of bees and the fables of keyboard, as well as the historical analysis articles of Coase and Zhang Wuchang. The purpose of this book is to illustrate a point: telling a vivid story can not replace detailed economic analysis. The economic fable should not be based on the analysis of the phenomenon. Of course, this belief is praiseworthy, but every economist usually has his own belief, and economics can not exclude subjective influence. The author of this collection has a clear belief that it is against blindness and against all economic narratives of market failure. I am afraid that the key is to urge economists and public policy makers to review their belief bases and adopt a healthier theoretical debate and more accurate empirical test. I agree with him on this point.