Viewpoints
[Mark Buchanan] You won’t Believe what‘s driving the economy
Feb. 6, 2017
Do humans act largely rationally, or can stories and rumors throw an entire economy off course? Lately, economists are increasingly recognizing that narratives matter.In the early 1920s, the US suffered a brutally sharp economic contraction, in which inflation turned rapidly to deflation and stock price-to-earnings ratios dropped to 50-year lows. The economists Milton Friedman and Anna Schwartz, in their book “Monetary History of the United States,” blamed an inexperienced Federal Reserve, which