Can a good story change economic reality?

NPR. This is the indicator from Planet Money. I'm Whelan Wong. And today, I'm joined by cohost of the business and investing podcast, This Time is Different, Ricky Mulvey. Hey, Ricky. Hey, Whelan. Good to see you. Good to see you too. And you're here because we know that numbers and data move economic decisions, but so do stories. Economic narratives, contagious stories that spread, and they can be singular. Take this one from president Trump. Tariffs give our country protection against those that would do us economic harm. Or they can come in multiples and narrative constellations. AI comes to mind from Sam Altman saying AI will create new kinds of jobs to NVIDIA's Jensen Huang saying it's the beginning of a new industrial revolution to Elon Musk. We will have the first time something that is smarter than the smartest human. Today on the show, we're diving into narrative economics, how the stories you tell and hear affect your economic reality. We'll look at how these stories gain power, the narratives that sparked a tech revolution. And I promise it's not all AI. We'll talk about how economic narratives lean more into power than truth and explain why they really matter in the world of investing. Plus, we've got a Nobel Prize winning economist to help us out. That's after the break. Support for NPR and the following message come from Edward Jones. A rich life isn't always a straight line. Unexpected turns can bring new possibilities. With a hundred years of experience navigating ups and downs, Edward Jones can help guide you. Let's find your rich together. Edward Jones, member SIPC. This message comes from ADP. ADP knows any new technology, any old competitor, any trendy thing, even a trendy thing that everyone knows isn't a great idea, but management just wants us to give it a try for a bit, can change the world of work. So whether it's a last minute policy change or adding a new company holiday, ADP designs forward thinking solutions to help businesses take on the next anything. ADP, always designing for people. This message comes from Bombas. Your feet hit the ground an average of 2,000 times in a mile. Bombas sports socks are designed to support you every step. Sprint to bombas.com/npr, and use code NPR for 20% off. Traditionally, economists only looked at data with hard numbers. But then Robert Shiller came along and said, wait a minute. People don't make decisions only with data. Stories really matter. In fact, these narratives are important economic data. Robert Shiller is the Nobel Prize winning economist famous for the Shiller ratio, which measures how expensive the stock market is. But his idea on economic narratives caught on with other economists, including other Nobel laureates. Darren Asimovlu, and I am an institute professor at MIT. Darren won the Nobel Prize in 2024 for his work on institutions and how they affect a country's prosperity. And one reason why Darren is interested …