TITLE:
Can Narrative Economics Justify Economic Fluctuations and Inequality? An Approach from Micro to Macro Perspective
AUTHORS:
Monika Gaur, Ravi Kant
KEYWORDS:
Narratives, Choices, Economic Policies, Growth, Fluctuation, and Inequality
JOURNAL NAME:
Theoretical Economics Letters,
Vol.11 No.1,
January
7,
2021
ABSTRACT: The opus dwells on aspects
of building narrative, especially for state policies. It thoroughly examines
economic narratives as a reason for the economic fluctuations and
aggrandizement of resources. The present work is a watershed development while
explaining the factors behind the dynamics of the economic system, engages upon
a bottom-up approach, and provides a model for the impact of narrative-driven
choices at the micro and macro levels contemplating the role of narrative in
escalating inequality. The present research is intrigued by the fact that
narratives form an inextricable role while forming and implementing state
policies; moreover, non-developmental narratives can dampen the impact of
desired policy and economic objectives. Importantly, since facts do not always
back narratives, erratic economic and social outcomes petered out from
conventional policy action. A few wealthy and resourceful people can swing the
narrative and build upon by the low literacy, learning poverty, lack of rational
approach, religious and caste factors. Such narratives subsequently influence
people’s decisions, often their political decision, which enhances their
probability of acquiring more wealth, leading to a perpetual concentration of
wealth and power in few hands. The reason for the “perpetual concentration” of
wealth and power lies with the existence of strong narratives that directly or
indirectly reinforces aggrandizement and causes penury to the few left out
underprivileged sections. Such inequality will be nothing short of being “narrative-driven
inequality”. The research also emphasized the role of institutions, media, and
technology, which unanimously plays a crucial role in creating, validating, and
disseminating narratives. An overall ethical responsibility must be felt and
shared for the common good and shared prosperity. The participative decision
making helps dilute non-developmental narratives.