A recent article on the International Monetary Fund (IMF)’s website, written by Princeton Economics assistant professor Karthik Sastry, ponders whether stories influence the economy. Sastry and his co-author, Joel Flynn of Yale University, continue their research from 2024, which introduced “new tools for measuring and quantifying economic narratives and used these tools to assess their importance for the US business cycle,” and suggest that narratives play a central role.

Read the full article to learn more about their research methods, findings, and implications.