The Contagion of Economic Models
In 2011, Jean-Baptiste Michel and a team of coauthors published an article in
Science providing evidence that mentions of famous people in books tend to
follow a hump-shaped pattern through time, rising, then falling, over decades
rather than months or years. They amplified their conclusions in a book,
Uncharted: Big Data as a Lens on Human Culture, by Erez Aiden and Jean-
Baptiste Michel (2013).
The same patterns seem to apply to economic theories. In chapter 5 we
consider the contagion of one of these narratives, the Laffer curve, a simple
model of the relationship between tax rates and the amount of tax revenue
collected. But let us first note briefly that these patterns apply even to
“highbrow” economic theories that circulate primarily among professional
economists. Figure 3.3 shows Google Ngrams results for four economic theories:
the IS-LM model (published by Sir John Hicks in 1937), the multiplier-
accelerator model (Paul A. Samuelson, 1939),7 the overlapping generations
model (Samuelson, 1958), and the real business cycle model (Finn E. Kydland
and Edward C. Prescott, 1982). All show hump-shaped patterns similar to those
of disease epidemics.8 For our purposes here, it doesn’t matter what is in these
theories. None of them has been proven completely right or wrong. They are all
potentially interesting. Each of them is a story whose popularity followed the
expected path of an epidemic.
For three of the models, the epidemic first became visible more than a decade
after the model was introduced, a phenomenon that we also see in the medical-
epidemic framework, where epidemics may go unobserved for a while after very
small beginnings. The number of cases may be growing steadily percentage-
wise, but the disease fails to be widely noticed until the number of cases hits a
certain threshold. In practice, the long lag between the publication of an
economic theory and its eventual strong epidemic status represents a time
interval over which the model evolves from something regarded as peculiar and
thought provoking into something that is clearly correct and recognizably great.
Over this gestational interval, other scholars in the discipline increasingly
appreciate the model, and the epidemic spreads through academic rituals, such as
paper presentations at seminars and major conferences.9 Eventually the models
make their way into textbooks. Still later, the model is talked about enough that

the news media begin to feel that it should be mentioned, and people outside of
the economics profession who pride themselves on their general knowledge
begin to feel they should know something about it. But in this late stage of the
epidemic, the model may begin to lose some of its contagion. Some people begin
to consider it stale and unoriginal even if it has merit, while others end up
forgetting about it completely.
The contagion of these theories did not generally take the form of someone
sitting down with a pencil and paper and saying, “Let me explain the IS-LM
model to you.” In most cases, the communication was probably much more
elementary and human. Economic historian Warren Young suspects that the
contagion of the IS-LM diagram had something to do with its resemblance to the
intersection of supply and demand that is perhaps the most famous image in all
of economics.10
In addition, the IS-LM model was a formalization of John Maynard Keynes’s
theory. Keynes was a brilliant writer, but as we have seen, many narratives are
associated with celebrities. Keynes himself was a colorful figure and a celebrity
in his own right: he hobnobbed with the Bloomsbury group of artists and
intellectuals, among other celebrities (including the writer Virginia Woolf, who
was embarking on her own epidemic of fame, which did not peak at least until
near the end of the twentieth century, long after her death in 1941). Keynes was
reputed to be gay or bisexual, and his male relationships were well known
among the tolerant Bloomsbury group, providing a spicy bit of gossip that, at
that time, could travel only by word of mouth. Gayness was not generally a good
thing for one’s career in Keynes’s day, but it might have been in the context of a
certain narrative. Keynes later married a beautiful ballerina, Lydia Lopokova,
who experienced her own epidemic of popularity after she retired from dancing,
likely because of her association with Keynes. And, as we have already noted,
Keynes was famous for his 1919 best seller, Economic Consequences of the
Peace, which in effect predicted World War II. In contrast, John Hicks, who first
published the IS-LM model, was not quite so colorful a figure. Thus stories
about Keynes were possibly “donkeys” that helped carry the IS-LM model to
contagion.11
Figure 3.3 shows the life history of four economic models. These histories
resemble not only the normal course of a disease epidemic but also the life
history of other kinds of narratives. Elements of the essential ideas in economic
narratives may survive as they are adapted and incorporated in later narratives