Narratives and Economic Policy: Theoretical Explorations and the Case of Central Bank Communication in Brazil

Carsten Herrmann-Pillath and Luís Bau Macedo ()

Journal of Contextual Economics (JCE) – Schmollers Jahrbuch, 2021, vol. 141, issue 3, 243-271

Abstract: Increasingly, economists study narratives and their causal impact on economic processes. This paper proposes a new theoretical framework of narrative analysis that is based on the philosophy of language, especially speech act theory, motivated by the observation that, so far, the economic approaches focus on the representational function of narratives and tend to emphasize negative consequences of biased, distorted, and simplified representation. In contrast, we define narratives as a medium of distributed cognition and mediators of collective agency in networks of agents operating in an uncertain and complex world that is materially constituted by their actions. After sketching the theory, we introduce a case study on the role of central bank communication in recent economic developments in Brazil for illustrative purposes, focusing on the role of financial audiences and a specific narrative genre, the “austerity genre” induced by the Brazilian Central Bank.

Keywords: Narrative Process Analysis; Speech Act Theory; Audiences; Brazil; Central Bank Communication; Austerity; Financial Sector (search for similar items in EconPapers)
JEL-codes: B41 B52 D80 E71 (search for similar items in EconPapers)
Date: 2021
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Journal of Contextual Economics (JCE) – Schmollers Jahrbuch is currently edited by Peter J. Boettke, Nils Goldschmidt, Stefan Kolev, Stephen T. Ziliak and Joachim Zweynert

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