Chapter 8. Seven Propositions of Narrative Economics
1. Shiller, 1989.
2. Arthur Krock, “What America Is Talking About,” New York Times, October 30, 1932, p. SM1.
3. Clearly, the original Keynesian idea that current income alone determines current consumption is not
accurate, as Milton Friedman (1957) pointed out. He showed that consumption expenditures track current
income much more for people in occupations where current income is a better guide to future income—that
is, occupations whose incomes are not so volatile year to year. He hypothesized that spending is determined
not by an individual’s current income, but by permanent income, the expected long-run average future
income. But so too, in the Great Depression, Friedman’s permanent-income hypothesis wasn’t entirely
accurate either. That model has people only reacting to income adjusted for its statistical properties.
Christina Romer (1990) pointed out that after the stock market crash of 1929, consumption demand
immediately fell, before people’s incomes had shown any evidence of decline. She concluded that the
reduced demand must have been some reaction to the newfound uncertainty surrounding the crash. Demand
depends on both expectations and uncertainty and through these as well on a variety of narratives, which,
once experts seem discredited, are all people have to suggest the future. Tobin and Swan (1969) showed
further problems with the permanent-income hypothesis.
4. https://www.thesun.co.uk/tech/5067093/lily-allen-bitcoin-billionaire-richer-than-madonna/.
5. See Shiller, 1989.
6. Siegel, 2014 [1994], pp. 250–53. The New York Herald Tribune, after expressing puzzlement why the
US stock market did not drop after September 3, 1939, offered the possible explanation that “it seems clear
that many persons who held on to their securities, or bought securities, were actuated by the belief, or the
hope, that the stock market would follow the general pattern of the last world war, when, after eight months
of doldrums during part of which there was no formal trading, it leaped upward in 1915 on the stimulus of
war orders for Europe.” “War and the Markets,” New York Herald Tribune, September 4, 1939, p. 18.
7. World Health Organization, 2003, p. xiii.
8. Vosoughi et al., 2018.
9. The original song was published in Song Stories for the Kindergarten in 1893 by Patty and Mildred J.
Hill. https://commons.wikimedia.org/wiki/File:GoodMorningToAll_1893_song.jpg.
10. Weems, 1837, p. 11.
11. Weems, 1837, pp. 13–14.
12. Wang et al., 2012.
13. Blanc, 1851, p. 91: “De chacun selon ses facultés, à chacun selon ses besoins.” Matthew 25:15
quotes Jesus: “to each according to his ability.”

Chapter 9. Recurrence and Mutation
1. See Kuran and Sunstein, 1999.
2. However, most Civil War deaths were caused by disease, not battle. If considered as a disease
epidemic, the Civil War was not the biggest in US history, not even close. See Nicholas Marshall, “The
Civil War Death Toll, Reconsidered,” New York Times Opinionator, March 2014, https://opinionator.blogs
.nytimes.com/2014/04/15/the-civil-war-death-toll-reconsidered/.
3. The term “Great Recession” was also attached to the mild 1990–91 recession, associated with another
war in the Middle East, and again inviting comparisons to the Great Depression, by US presidential
candidate H. Ross Perot during the 1992 presidential campaign. See James Flanagan, “What an Economy in
Low Gear Means,” Los Angeles Times, July 26, 1992.